First and foremost it’s important to note that there are currently no interest-only mortgages available in Spain.

Due to recent changes in law, it is advisable that you seek advice from industry professionals who have the most recent information, such as our team at FFA. The most recent figures suggest that the average mortgage has an interest rate of 2.53%, which has seen a very slight increase vs. last month. Other interesting statistics include:

• 56% of mortgages in Spain have variable interest rates
• 44% have fixed interest rates

To speak with a member of our team about the best mortgage deals available to you, don’t hesitate to give us a call today.

Well, the answer is most probably Yes, subject to the status of course!  As residential tourism is more common in Spain than other countries such as Germany or Britain because of the nice weather, Spanish banks will allow non-residents to contract a mortgage to buy a second home in Spain.

Spanish banks will insist that a potential borrower can show proof of income and savings to cover the deposit and costs associated with the purchase.

Applicants must have monthly disposable income available after taking into account their existing monthly significant expenses such as mortgages, loans, credit cards or school fees (for example), in their home country.

If these aforementioned costs plus the new Spanish mortgage don’t exceed approximately one-third of their net income, then an agreement in principle could be obtained.

A major benefit of taking a Spanish mortgage is that it is possible to arrange a full, economic mortgage approval before a property is located, so this provides the buyer with the assurance that their finances are secured before they even visit Spain.

This provides peace of mind to the buyer and is also a helpful negotiating tool as it means they are effectively as good as a cash buyer.

One notable thing to take into account is that Spanish banks will be more flexible in terms of income documentation required to be seen the less mortgage you require. For example, if you set yourself up as self-employed just 18 months ago, it would be probably wise not to insist on obtaining a maximum mortgage possible but rather lower your loan to value expectations a bit. The team at Fluent Finance Abroad can advise on the best course of action.

This depends upon the type of property being purchased.  If it is a residential/holiday home, then Spanish banks are currently offering non-residents mortgages of approximately 60% – 70% of the purchase price or valuation, whichever is the lower.  This means that the deposit required by the consumer would be 30% – 40%.

In the case of a rural property (rustica), this could be a lower loan to valuation as the property may valuer lower, so typically 50%-60%

In the case of a commercial venture or a construction mortgage, these would be considered on a case by case basis, usually with around 50% loan to value being the norm.

Costs to purchase must also be taken into account and these can vary depending upon the area in Spain where the buyer is purchasing, ranging from 13% – 15%.

In order to know how much deposit is required, the minimum amount that the buyer would need in today’s market therefore would be 40% plus 13%, so 53% of the purchase price.

To obtain a mortgage agreement Spain normally takes between 4 and 6 weeks from your first point of contact and depending on if you have the required amount of funds available for a deposit.

Interest rates are varied and can fluctuate greatly between lenders, if you require a fixed rate or a variable rate deal.

Generally, our white label exclusive variable mortgage deals start from 1.5% for non-resident mortgages and 2% for our exclusive fixed rate deals.

In Spain, lenders are very keen to highlight their headline rates which seems very attractive but we always focus on what the real cost of the lending is which is the annual percentage rate (APR) or Tasa Annual Equivalente (TAE) which is the headline interest rate plus all the hidden extras like mortgage arrangement fees, valuation costs, any additional products that need to be taken such as home insurance, life insurance, payment protection insurance (PPI) and even alarm systems.

For example, we have seen clients offered a headline rate of 2 fixed but the real cost of the mortgage (APR / TAE) was 4.5% when all the insurances where factored in.

The most important thing is that you either hunt for the very best deal yourself (if you have the time and the know how) ensuring you focus on the real cost of the lending or you entrust an expert company like Fluent Finance Abroad to secure you the very best mortgage deal around.