Spanish Mortgages Made Easy: Buy Property in Spain

Begin your journey to own property in Spain with confidence, supported by Worldwide Property Co. As international mortgage brokers and buyer’s agents, we excel in facilitating property acquisitions for non-residents in the Spanish property market, offering expert advice on tailored solutions for Spanish mortgages.

TAILORED SOLUTIONS FOR YOUR SPANISH PROPERTY NEEDS

Whether you’re envisioning a beachfront villa in Costa del Sol, a chic apartment in Mallorca, or a rustic farmhouse in Andalusia, our services cater to your unique requirements. We work with leading Spanish lenders to secure competitive rates and flexible terms, ensuring the best deals possible.

Explore our Spanish Mortgage Services, gain insights into essential documents, and understand the buying process.

YOUR TRUSTED PARTNER FOR PROPERTY INVESTING IN SPAIN

At Worldwide Property Co, we understand that purchasing property abroad can be complex. That’s why we actively assist our clients every step of the way, ensuring transparency and a hassle-free process from pre-approval to completion. Our provided information offers clarity and insight into your potential investment, empowering you to make informed decisions with confidence.

START YOUR SPANISH PROPERTY JOURNEY TODAY

Ready to explore property opportunities in Spain? Let Worldwide Property Co be your trusted ally. Explore our services, reach out to our team, and take the first step towards achieving your property goals in Spain. Your adventure begins here.

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FAQs

Getting a Spanish mortgage can be challenging due to different lending criteria and processes compared to other countries. However, with the right guidance and preparation, it is entirely possible. Worldwide Property Co can assist you in navigating the Spanish mortgage market, ensuring you meet all requirements and secure the best mortgage terms.

Typically, non-residents are required to provide a deposit of at least 30% of the property’s purchase price. Residents may need around 20%. Worldwide Property Co can help you understand the exact deposit requirements and secure favorable mortgage conditions.

Yes, UK citizens can obtain a mortgage in Spain. Spanish banks offer mortgage products to non-residents, including UK citizens. Worldwide Property Co has extensive experience assisting UK clients in securing Spanish mortgages, providing expert advice and support throughout the process.

The minimum mortgage amount in Spain generally varies by lender but is typically around €50,000. Worldwide Property Co can help you identify lenders that best suit your financial needs and ensure you meet the minimum mortgage requirements.

Yes, foreigners can get a mortgage in Spain. Spanish banks offer mortgage products specifically for non-residents. Worldwide Property Co specialises in assisting international clients, helping them secure the best mortgage deals in Spain.

Some common pitfalls include legal issues with property titles, unexpected taxes, fluctuating exchange rates, and differences in property law. It’s essential to conduct thorough due diligence and seek professional advice. Worldwide Property Co provides expert guidance to avoid these pitfalls, ensuring a smooth property purchase process.

Yes, having a Spanish bank account is generally necessary to buy a property in Spain. It facilitates the payment of taxes, utilities, and mortgage instalments. Worldwide Property Co can assist you in setting up a Spanish bank account and streamline the entire purchasing process.

Yes, there are a number of taxes associated with buying, owning and selling property in Spain. These are:

  • Impuesto sobre Bienes Inmuebles (IBI): This is an annual property tax paid by the property owner. The rate typically ranges from 0.4% to 1.3% of the property’s cadastral value, depending on the location.

  • Plusvalía Municipal: This is a municipal tax on the increase in land value, paid when a property is sold or transferred. The rate varies by municipality and is based on the increase in the property’s value over the time it was owned.

  • Impuesto sobre la Renta de no Residentes (IRNR): Non-resident property owners must pay this annual income tax. It’s calculated at 24% of a deemed rental income, even if the property is not rented out. The deemed rental income is typically assumed to be 1.1% or 2% of the cadastral value.

  • Impuesto sobre Transmisiones Patrimoniales (ITP): This is a transfer tax paid by the buyer when purchasing a resale property. The rate varies by region, generally between 6% and 10% of the purchase price.

  • Impuesto sobre el Valor Añadido (IVA) and Actos Jurídicos Documentados (AJD): These taxes apply to new properties. IVA is 10% of the purchase price, and AJD is approximately 1.5%.

  • Wealth Tax (Impuesto sobre el Patrimonio): For high-value properties, owners may also be subject to wealth tax, with progressive rates ranging from 0.2% to 2.5% of the net property value exceeding a set exemption threshold, which varies by region.

Obtaining a 100% mortgage in Spain is very rare and typically only available under specific conditions, such as purchasing bank-owned properties. Most lenders require a minimum deposit. Worldwide Property Co can help you explore your financing options and find the best mortgage terms suited to your situation.

WHAT DOCUMENTATION DO I NEED FOR A SPANISH MORTGAGE?

Here’s what you’ll need to provide with your application:

Personal Documents

  • Valid passport copy.
  • Birth/marriage certificate, driving license, national ID card, or resident card.
  • Divorce consent order and decree (if applicable).
  • Current main residency mortgage statement or tenancy agreement.

Income: Salaried or Retired

  • Recent pay slip/pension statement.
  • Last 3 years’ tax certificates (e.g., P60).
  • Employer/pension provider letter on headed paper (Employment
  • Contract acceptable).

Income: Self-employed/Company Director

  • Last 3 years’ full tax returns.
  • Latest certified business accounts.

Financial Information

  • Last 3 months’ bank statements.
  • Statements for vehicle financing or other loans.
  • Proof of personal financial contribution.
  • Latest credit card statement.
  • Proof of deposit and purchase cost availability.
  • Rental investment income for each rental property: address, valuation, recent mortgage statements, tenancy agreements.
  • A copy of your credit score report.
  • Recent statements of financial investments, share portfolios, pensions.

Property Being Purchased

  • Signed preliminary sales agreement.
  • Land registry document (nota simple).
  • Property advertisement link or PDF.

Buying Process

1. Assess Your Budget: Confirm how much you can borrow by speaking to one of our mortgage brokers

2. Set Up Foreign Currency Exchange: Open an account with a reputable Foreign Exchange dealer (ask about our panel of FX dealers)

3. Secure Your Property: Agree on the price of the property and sign the Reservation Agreement. A small fee will need to be paid at this stage in order to secure the property for 30 days. Should the sale go ahead as planned then this fee will be deducted from the purchase price, if the sale falls through then this fee will be forfeited.

4. Budget for Additional Costs: Allow for an additional 10-20 % on top of the purchase price which will include hidden costs such as legal fees, transfer tax, Notario fees and Land Registry.

5. Arrange a Mortgage: Move forward confidently by letting us arrange a mortgage that aligns with your financial circumstances and chosen property.

6. Arrange Life Insurance: Secure your financial commitments by arranging life insurance that corresponds with your mortgage amount.

7. Open a Spanish Bank Account: Facilitate seamless transactions by opening a bank account in Spain dedicated to managing your property-related finances.

8. Arrange Building Insurance Safeguard your investment by arranging building insurance, particularly crucial if you’re purchasing an existing property (not off-plan).

9. Signing the Purchase Contract: Solidify the sale terms by signing a purchase contract, including a completion deadline. Typically, a deposit of 10-20% of the purchase price is required at this stage.

10. Finalise Your Purchase: Pay the balance of the asking price within the specified time frame and the Notario will prepare the conveyance document (the Escritura de Compraventa). Once this has been signed in the presence of the Notrario, the document will be submitted to the Land Registry.

11. Completion: Congratulations! Once all formalities are concluded and the deed is signed, you officially own the property!

Mortgage Terminology

Purchase price

This is the price of the property you are looking to acquire, excluding fees. It may include or exclude the VAT, depending on the type of property.

Mortgage Amount

This is the mortgage amount you want to apply for – or the maximum mortgage amount we can offer.

LTV


This is the Loan to Value. The maximum loan to value depends on a variety of factors. For non-residents, the LTV ratio is generally up to 60-70% of the property’s value. For residents, it can be higher, typically around 80% of the property’s value. These ratios can vary based on the lender’s policies and the borrower’s financial situation.

Interest Rate


This is the rate being offered by the lending bank. Warning, the rate is locked only when the mortgage offer is printed – so there is a risk that the rate may vary.

Duration

The duration of your mortgage as a non-resident, typically between 20-25 years. Some Spanish banks may offer mortgages with terms up to 30 years, but this can depend on the individual’s financial situation, age, and the specific policies of the lending institution.

Monthly Repayment

This is the monthly cost of your mortgage, excluding the mortgage insurance.

Insurance Premium

The amount that the mortgage insurance (which is mandatory in most cases) could cost you based on the original mortgage amount borrowed. We may be able to reduce it.

Deposit

This is the money from your own funds/savings that you need to put down in order to buy the property (not to be confused with Personal Contribution, see below), excluding fees.

Notary Fees


The Spanish equivalent of the stamp duty – which is the same whether you are paying by cash or with a mortgage. This is payable at the signature of the deed of sale and is not something that can be added to the mortgage.

Property Tax

These are taxes that are applied when buying, selling and owning property in Spain. These include:

  • Impuesto sobre Bienes Inmuebles (IBI): Annual property tax based on the cadastral value. Typically ranges from 0.4% to 1.3% of the cadastral value, depending on the municipality.
  • Plusvalía Municipal: This is a municipal tax on the increase in land value, paid when a property is sold or transferred. It’s based on the increase in the property’s value over the time it was owned.
  • Impuesto sobre la Renta de no Residentes (IRNR): Annual income tax for non-resident property owners, based on deemed rental income. 24% of the deemed rental income (assumed at 1.1% or 2% of the cadastral value).
  • Impuesto sobre Transmisiones Patrimoniales (ITP): This is a transfer tax paid by the buyer when purchasing a resale property. The rate varies by region, generally between 6% and 10% of the purchase price.
  • Impuesto sobre el Valor Añadido (IVA) and Actos Jurídicos Documentados (AJD): These taxes apply to new properties. IVA is 10% of the purchase price, and AJD is around 1.5%.
  • Wealth Tax (Impuesto sobre el Patrimonio): For high-value properties, owners may also be subject to wealth tax, which varies by region.

Broker Fee


We charge a fee of 1% of the loan amount in the event of a client’s purchase being successfully financed by a bank. This equates to a very small percentage of the loan amount over the life of the mortgage. Our goal is to try and secure you a 20-year fixed rate at 1.5% so that you don’t need to refinance every 3-5 years (and incur repeated fees) as one might in the UK. Depending on the bank, the complexity of the borrower’s profile and the mortgage amount, we work a total of 10 to 30 hours on each application. This is payable at the signing of the deed of sale.

Bank Fee

Each bank has a different fee structure; the banks we work with tend to offer rates that range from 0.3% to 1% of the loan amount. Financing non-resident buyers requires expertise and more time than arranging a mortgage in your home country. The process will take up to 4 months (occasionally even longer for bigger deals) so the lender charges accordingly. This is payable at the signing of the deed of sale.

Personal Contribution

This is the total money you need to pay from your savings and it is payable at the signing of the deed of sale. For off-plan properties with stage payments, you must pay your deposit first before the mortgage kicks in.

Collateral Required

When dealing with a private bank, you can decide together with your adviser how to invest your portfolio. Anything with an ISIN number can be considered as long as it’s easily understood by the banker – but it needs to make sense from a risk perspective since the funds are collateralised against the loan. Please note that French Private Finance cannot provide investment advice.

Total Interest Paid

This is the amount of the interest that will be paid over the course of the mortgage if you do not make overpayments.

Total Insurance Paid

This is the amount of the mortgage insurance that will be paid over the course of the mortgage if you do not make overpayments.

APRC

This is the actual percentage rate you will pay on your purchase and includes the mortgage ratemortgage insurance ratebank feesbroker fees and mortgage registration tax.

Total Cost of the Loan (fees + interest + insurance)

This is the total cost of your loan paid over the course of the mortgage if you do not make overpayments.

Total Deposit (including fees and collateral)

This is the total amount that needs to be paid upfront to the bank.

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