The ins and outs of getting a mortgage in Spain


IF YOU’RE a non-resident expatriate and looking to buy a property in Spain, you might be caught out by some unexpected stipulations.

Here’s what you should know before you apply for a mortgage on that dream home in the Spanish sun:

A credit rating is necessary

Spanish banks will expect a credit rating from your country of origin or residency. Any money the buyer invests must be accounted for.

Twenty-year mortgages are standard

Banks in Spain tend to offer non-residents a 20-year, fixed-rate mortgage. This is to reduce risk for the banks and ensure steady repayments.

Non-residents pay more

Expats who aren’t Spanish residents pay more interest on their mortgages than those who are. You can expect this to be around 2.5 per cent for a fixed-rate mortgage.

They are also lent less money as, in the case that the mortgage isn’t repaid, the bank is only left with the property itself as a guarantee. Non-residents can expect to receive around 60 per cent of the total property value.

When selling you have to pay 3 per cent tax

All foreign homeowners are required to pay the same amount of tax on their homes as Spaniards, as well as three per cent of the total value to the Spanish Tax Office when they sell the property.

Documents must be translated

All paperwork required for the purchase of the mortgage must be translated into Spanish. Some banks also require that the documents are apostilled.

Extra note: You will also need to obtain a NIE (Foreigner Identification Number) from the local police station or embassy to open a bank account or apply for a mortgage in Spain.