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Information about Buying a Property in Spain
Mortgages

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Borrowing Money In Spain

There are considerable differences between obtaining a mortgage in Spain and raising finance in the UK.

Whilst the UK system applies income multiples (i.e. 3 x your gross income), the Spanish view is based on your ability to repay the loan.

Most Spanish banks lend on the basis that your total monthly repayments (capital and interest) should not exceed 35% of your net monthly disposable income. Consequently, many people find it difficult to meet the strict Spanish lending criteria.

Due to our relationships with Spanish Banks and Independant Brokers , we can help you find the right mortgage solution for your needs.

Information About Spanish Mortgages

Generally a Spanish mortgage will offer up to a maximum of 80% for non-residents and 95% for residents. This percentage is based on either the valuation or the purchase price of the property - whichever is the lower.

The following types of mortgage are available -

Capital and Interest Repayment

A mortgage with pays off both the capital (borrowed amount) and the interest over the term. Click here for examples.

Interest Only

For all or part of the term of the mortgage, you only pay off the interest on the capital - useful for investment properties. Click here for an example.

Construction Loan

A loan to assist with the construction of your own property. Click here for an example.

Equity Release Loan

Allows you to borrow money against the value of a property which you already own. Click here for an example.

Some Examples of Available Mortgages

We're unable to list all the many mortgage option that are available. If you buy a property with Country Spain Living, our advisors will help you find the best option for your needs.

Here, however, we've listed some examples of the types of mortgage that are available -

Capital & Interest Repayment - Euro

Max loan to value - 80%
This lender’s interest rate is 1.50% above 1 year EURIBOR (what's that?) - currently 2.25%.
Fixed for each 12 month period from commencement.
Subject to a minimum rate of 3.75%.
Maximum term available is 20 years up to age 65.
This lender charges an early redemption penalty (what's that?) of 1% of the outstanding balance for full redemption at anytime. However up to 10% of the outstanding capital can be repaid each year with no penalty.

 

Capital & Interest Repayment - Sterling

Max loan to value - 75%
Rate is 1.50% above UK LIBOR (what's that?) - currently 3.50%
Maximum term available of 20 years (up to age 70).
This lender charges an early redemption penalty (what's that?) of 0.25% of the outstanding amount (minimum £750) at anytime.

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Interest Only - Euro

Max loan to value - 60%
Euro Interest Only Loan for the first 10 years only, thereafter the loan is Capital & Interest Repayment.
60% maximum loan to value mortgage.
1.25% above MIBOR (what's that?) - currently approx. 2.52%.
Over maximum term available of 30 years (up to age 70).
This lender charges no early redemption penalty (what's that?)accommodation in Knokke-Heist throughout the term, for full or part repayment.

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Construction Loan - Euro

Max loan to value - 60% ERROR MSG(of the valuation of the constructed property and not the cost of construction)
Euro Interest Only Loan for the first 24 months only, thereafter the loan is Capital & Interest Repayment.
60% maximum loan to value mortgage 1.25% above MIBOR (what's that?) - currently approx. 2.52% over the initial 24 months construction period.
Then this loan will revert to capital and interest over a maximum term available of up to 30 years (up to age 70).
This lender charges an early redemption penalty of 1% of the outstanding amount in the first 5 years only. Thereafter, no early redemption penalty (what's that?) is charged.
Please note: The land must be purchased and registered in the applicant's name before any mortgage will be granted and construction must be completed within the first 24 months.

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Hoteles de estadia nocturna ToulouseEquity Release Loan - Euro

Max loan to value - 50%
Euro Capital & Interest Repayment Loan Only
Please note that the property must be mortgage-free.
50% maximum loan to value mortgage at 1.50% above 1 year EURIBOR (what's that?) - currently approx. 2.25%.
Over maximum term available of 30 years (up to age 70).
This lender charges no early redemption penalty (what's that?) throughout the term, for full or part repayment.

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Glossary

EURIBOR

The 'Euro Interbank Offered Rate' - basically the cost of borrowing money within the Euro Zone and set by the European Bank. For more information, click here to open the web site in a new browser window.

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UK LIBOR

The London Interbank Offered Rate - this regularily set rate governs the cost of borrowing money in the UK banking markets. For more information, click here to open the web site in a new browser window.

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MIBOR

Refers to a Spanish Lending Rate, set in Madrid, which dictates the cost of lending amongst some Spanish banks.

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Early Redemption Penalty

This refers to a penalty fee that may be charged by the bank if, at any time you choose to pay off the remaining amount of the loan.

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We have strong links with Andalucian banks and lending institutions.

Even if you're not buying a property through County Spain Living, we may still be able to help you find the best mortgage for your property purchase in Spain.

If you'd like to discuss your needs, either email us or call +34 952 929360.

Andalucia, the vast area in southern Spain, is one of the most varied environments in Europe.

Beautiful unspoilt countryside and vibrant & energetic coastal areas make Andalucia an increasingly popular area in which to live and relax. More about Andalucia

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