Many overseas buyers choose to finance their purchase in Spain with a Spanish mortgage. Here the experts from A Place in the Sun Mortgages break down the most frequently asked questions,
1. Can non-residents get a mortgage in Spain?
2. What size deposit do I need?
One of the biggest differences between buying in the UK and buying in Spain is the deposit requirement. Whilst in the UK a deposit can be as low as 10%, for non-residents seeking a mortgage in Spain deposit requirements can be much higher. The minimum starting deposit is typically 30 - 40%.
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3. What other costs should I expect when applying for a Spanish mortgage?
When you're planning your Spanish property purchase it's important to factor in the additional costs that you will incur:
- Property tax on resale properties (usually 6-10% of the purchase price)
- If you're buying a new build you will need to pay an additional AJD tax
- Legal, notary and gestoria costs
- Opening fee from the bank
- Valuation of the property
- Mortgage broker fees
4. What documentation do I need?
When you apply for a Spanish mortgage, your bank will expect to see the following documents (requirements will vary between lenders):
- Valid passport or in-date ID
- An NIE number (your Spanish tax identification number)
- Proof of savings
- Proof of income
- Recent bank statements (usually 3–6 months)
- Credit reports
- 2 - 3 years of tax returns
- Details of existing financial commitments
- Employment contracts
Make sure you have all your documentation in order before you start the application process - Spanish banks frequently reject mortgage applications because of documentation delays.
5. Is it better to pay for a property outright or finance it?
Buying a property outright can feel reassuring, as it removes monthly repayments and means you won't pay any interest. However, taking out a mortgage can be a sensible option, especially when interest rates are low and your savings could potentially achieve better returns elsewhere. Many overseas house hunters choose to finance part of their purchase so they can diversify their investments, rather than tying all their capital up in one place.
If you're exploring your options, A Place in the Sun Mortgages can help you understand what you could borrow and guide you through the process of securing the right finance for your overseas property purchase.
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