Spanish mortgages work differently: the 12 keys you need to know

Yes — clearly. Spanish banks lend both to non-residents and to international clients who have only recently moved to Spain, as long as you meet their lending requirements.

Criteria vary from bank to bank, and even within the same bank depending on the route your application takes to reach them. The key factors are:

• Debt-to-income ratio (DTI) — the central ratio a bank uses to assess a mortgage. Each bank has its own criteria and its own way of calculating it, but as a general rule they will lend where DTI stays below 35%.
• Stability of income — how long you have been in your current job, or running your current business, matters a great deal.
• Saving capacity — banks want to see clients who save and who run their finances in an organised way. Having the funds available to cover the share the bank does not lend is essential.
• Credit history — they pay less attention to the score itself than to your record of past borrowing, and to any defaults or late payments.

Spanish banks set a maximum loan-to-value (LTV) based on the currency you are paid in and on your tax residency.

As a general rule, non-resident mortgages are limited to 70%, while residents in Spain can generally borrow up to 80%. Some exceptions apply, and across the market the full range runs from 50% to 75% for non-residents.

That is the maximum, though. Your finances still have to show the bank what it wants to see on DTI, on savings and on the rest.

On a non-resident mortgage where the bank covers 70%, you would need to cover the remaining 30%, plus the costs of buying. Those costs vary considerably depending on the region of purchase, and can range from 8% to 15%.

Beyond the property price itself, you need to budget for the following:

• Taxes
  • Resale: between 6% and 11%, depending on the region of purchase and the price of the property.
  • New build: 10% VAT, plus stamp duty — which again varies by region, between 0.5% and 1.5%.
• Legal costs — we recommend appointing a lawyer to carry out the legal checks and to guide you through the whole purchase process. Allow around 1%, although the percentage will be higher on lower-value properties.
• Notary and land registry costs — allow up to 1%.

By law, Spanish banks cover all of the set-up costs of a mortgage. That leaves the borrower with two: the valuation of the property — between €500 and €2,500, depending on its value — and the broker's fee.

Our fee depends on the mortgage amount. Once we have spoken and understood your situation, we prepare a personal simulation for you, and the fee is set out in full there — so you see it alongside the mortgage figures, before you commit to anything. It is purely success-based: nothing is payable until the purchase completes.

Once we have collected all of your financial documents, we apply to the banks for approval. That can take anywhere from 48 hours in straightforward cases to a few weeks in more complex ones.

Bear in mind, too, that banks slow down substantially over holiday periods — summer, Easter, Christmas and local holidays.

Once your mortgage is approved, carrying out the property valuation and getting everything ready to sign takes a further four to six weeks.

Unlike many countries, Spain offers fixed rates that run for the entire life of the mortgage. So when you sign, you can fix your interest rate for the whole term.

The types of mortgage available are:

• Fixed rate — one interest rate for the whole term.
• Variable rate — generally indexed to 12-month Euribor. The rate is recalculated every 6 or 12 months, and is the index rate plus an agreed spread.
• Mixed rate — a combination of the two. The rate is fixed for typically 5 to 10 years, after which the mortgage becomes variable: indexed, and revised every 6 or 12 months.

Rates move a great deal with central bank rates and with Euribor, so the best way to find out where they stand today is to speak to us.

Yes, you will need an NIE number eventually — but we can start the process without one, and we will guide you through the easiest way to obtain it later on.

Yes. With us, the entire process is handled online, with no need to travel or to visit banks until the last stages. We work with banks that are able to run the process fully online.

Signing the purchase and the mortgage at the notary is the only step that requires travelling — and even then, it is very common to give power of attorney to your lawyer so that they can sign the deeds on your behalf.

Experience in mortgages allows a broker to present your application in the best possible way, to the right banks, and then to push those banks for approval and for the best terms available.

With mortgage terms typically running 15 to 25 years, a small reduction in the interest rate obtained can mean thousands of euros saved over the life of the loan.

And that is before the hassle of shopping around bank after bank yourself — waiting on answers that never arrive, or getting a flat no simply because something in your file was not understood.

We do the hard work of understanding your case, presenting it to the banks most likely to say yes, and fighting for the best possible terms for you.