Buying a property in Spain can be a great investment, but navigating the Spanish mortgage market as a foreigner can be daunting. The good news is that in 2024, mortgage rates will be competitive, and lenders will cater more to expats and international buyers. This guide will walk you through everything you need to know to land the best Spanish mortgage deal.
Determine your budget and your mortgage eligibility.
Before even starting your mortgage search, you need to have a clear understanding of two things: how much you can afford to spend on a property in Spain and what you’ll likely be eligible for mortgage-wise as a foreign buyer.
Factor in all costs; obviously, the purchase price is just one piece. Be sure to calculate tax, notary and land register fees, maintenance fees, renovations, etc. A good rule of thumb is purchase price + 10-15%.
Mortgage eligibility differs; the main advantage of being a resident vs. a non-resident is that residents can borrow up to 80% of their loan-to-value on their primary home, while non-residents are usually capped at 70%.
As a foreigner, most lenders will want to see:
- Steady income history
- Good credit score
- Sizable down payment (min. 25–30% for non-residents)
- 1-2 years of Spanish bank account activity
Use eligibility criteria as a guide, but connect with brokers to explore your specific options.
Understand Mortgage Rates and Fees in Spain
As you explore Spanish mortgage options, you’ll need to educate yourself on current interest rates and standard fees charged by lenders.
Interest rates: average mortgage rates in Spain have increased slightly but remain competitive, currently around 2-3% for fixed-rate terms. Compare the EURIBOR rate and lender margin.
Fees add up; common fees include:
- Arrangement Fee: 1-2% of the loan amount
- Valuation/Appraisal Fee: €300-500
- Notary Fees: 0.5–1%
- Land Registry Fee
- Early Repayment Fee: if paying the loan off before the term
Banks sometimes waive or discount fees for certain clients, so negotiate!
Research and compare the top Spanish mortgage lenders.
You’ll have a few options on where to get your Spanish mortgage:
Spanish Banks: Popular options include CaixaBank, Santander, BBVA, and Bankinter.
Digital Challengers: Bnext, MyInvestor: faster service oriented to ex-pats
International Brokers: FX International, Enness: mortgage consultants for non-residents
Weigh factors like rate deals, language support, application requirements, and fees. Brokers can offer personalized advice based on your profile.
Navigate the Mortgage Application Process
Understanding the required steps and documents in the Spanish mortgage application process can ensure everything goes smoothly.
Documentation Needed
- Passport and visa for non-EU citizens
- Proof of Address
- Bank statements
- Income certificates
- Employment contract
- Tax statements
Property Valuation An approved independent valuator will verify that the property value matches the purchase price. This assessment is required by most lenders.
Credit Check and Affordability Assessment The lender will pull your credit report and ensure your income and assets qualify for the loan amount needed.
Conditional Approval At this point, you may receive conditional approval outlining the rate, fees, and terms.
Final Steps to Funding
- A mortgage deed signed at the notary
- The remaining funds were transferred for completion.
- Bank accounts and payments setup
Here are some tips for foreigners getting a Spanish mortgage:
Tips for Foreigners Getting a Spanish Mortgage
As a foreign buyer, you may need to take extra steps to boost your eligibility:
Show 6–12 Months of Financial Activity in Spain Having an established Spanish bank account history can ease lender concerns and boost your mortgage eligibility as a foreigner.
Get key documents translated or notarized. You may need to provide officially translated or notarized bank statements and employment contracts.
Leverage income and assets from your home country.
Some lenders allow this with clear documentation of foreign assets, pensions, investments, etc.
Final Steps After Approval: Signing at the Notary
Once you receive final mortgage approval, there are a few last steps to finalize the process:
Additional closing costs
- Notary Fees: Around 0.5–1% of property value
- Land Transfer Tax: 6–10%, depending on the autonomous region
- Registration Fee: Approximately 0.5–1%
Factor these amounts into your planning!
Contract Signing and Funds Transfer You’ll sign the final mortgage contract at the notary’s office, and then the remaining funds will be transferred to complete the sale.
Set up bank accounts and payments. Work with your bank to establish auto-payments for your monthly mortgage installments from a Spanish bank account.
Conclusion and Final Recommendations
The key takeaways are:
- Calculate the total costs and determine the realistic loan amount.
- Understand eligibility as a foreign buyer.
- Research competitive rates and negotiate fees.
- Use a broker to simplify the process.
- Get translations and documentation in order.
- Leverage income or assets from your home country.
Given the application complexity and eligibility advantages, working with an international mortgage broker is highly recommended to help foreigners navigate the process and lock in the best Spanish mortgage in 2024!
