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Spanish Mortgage

Spain is the country where the impossible can be shifted into the omnipotent actuality. It is here where you can realise your dream of a cosy Mediterranean-style villa or an apartment with a sunny terrace and spectacular sea views. To become a happy Spanish homeowner you don’t need to have millions in your bank account, but just opt to acquire a property through a mortgage.

Over the years we have established close confidential contacts at the corporate level with a range of Spanish banks, and thanks to that we can help you get a Spanish mortgage on most favourable terms. MEDITERRANEAN PROPERTIES collaborates only with leading Spanish banks: Bankia, Bankinter, Banco Mare Nostrum (BMN), BBVA, Sabadell, La Caixa. Loan-to-values normally ascend up to 60%, while the mortgage terms range from between 5 to 30 years.

Getting a Spanish mortgage has great advantages, such as low interest rates and bank commissions as well as favourable write-off conditions.

The interest rates are calculated as X% + Euribor, where X is the bank base rate.

Euribor (The Euro Interbank Offered Rate) is a Euro system interbank lending rate determined by the key interest rate (on main refinancing operations) set by the European Central Bank (ECB). Euribor is a referential rate used to calculate mortgage payments in Spain. The bank base rate depends on whether the applicant has a Spanish resident status or not.

Those applicants who have a Spanish resident status and are working in the territory of Spain may get a 1,3 – 3% mortgage interest rate above Euribor. Non-residents are offered 2,5 – 3,0% above Euribor. 

 

Types of loans available in Spain:

  • Fixed rate (the interest rate does not change during the whole period of repayment; as a rule is offered to Spanish residents who work in Spain);
  • Variable rate (depends on Euribor and is revised every 12 months; as a rule is offered to non-residents).

According to Spanish laws, the monthly payment on the mortgage should not exceed 35% of applicant’s net monthly income.

Buy-to-let mortgages using rental income as part of the affordability assessment are not available. There also exist early repayment penalties which by law cannot exceed 0,5% in the first five years and 0,25% thereafter (for partial and full overpayment). In case of a fixed rate, the redemption penalty increases maximum to 2,5%.

Before applying for a Spanish mortgage, an applicant should get a NIE number (the identification number for non-Spanish citizens) and open an account in a Spanish bank.

Home insurance and the lender’s life insurance are obligatory for all properties acquired through a mortgage; they are paid annually, and their amount depends mostly on the type of property and the lender’s age.

The whole process of completing on a Spanish mortgage takes about 4-5 weeks.

 

Documents required for mortgage in Spain (employed)

  • Passport/ ID card
  • N.I.E. number
  • Tax return
  • Credit report
  • Bank statements
  • Proofs of other income
  • Private sale-purchase contract
  • Employment contract

Documents required for mortgage (legal entities)

  • Passport/ ID card
  • N.I.E. number
  • Tax return
  • Credit report
  • Balance sheet
  • Letter from your accountant
  • Bank statements
  • Proof of other income
  • Private sale-purchase contract