Applying for a mortgage in Spain
Not everyone can or wants to make money available for a property purchase in full. Banks then provide the financing with loans secured by mortgages. There are differences here between mortgages for Spaniards and those for foreigners living in Spain.
&Foreigners living in Spain can only finance a maximum of 70 percent of the purchase price of a property through mortgages from Spanish banks. In comparison, Spaniards are granted 80 percent. In addition, the interest rates on mortgages granted to foreigners are higher. In addition, a large number of documents have to be submitted. This may seem daunting at first glance. However, foreign investors also have access to bank financing.
Tax residency is decisive
The decisive factor for a mortgage for real estate financing is not the nationality, but the tax residence. If this is in Spain, it is possible to take out a normal mortgage. In the other case, there are special mortgages for foreigners. With these, banks want to protect themselves in the event of a default in order to enforce specific measures to recover the loan granted. This form of mortgage is therefore a riskier product than a similar mortgage for taxpayers.
Peculiarities of mortgages for foreigners
There are differences in the mortgage products offered for foreigners, but there are also some similarities: The amount of the loan must not exceed 60 to 70 percent of the purchase price. Buyers must therefore expect to finance 40 to 50 percent from their own funds - plus an additional 10 percent for incidental costs. As a rule, the interest rates for mortgages to foreigners are also higher, especially if they are buying the Spanish property as a second home, as is usually the case.
The required documents
If you want to apply for a mortgage for foreigners, you should be able to provide the following documents:
- Photocopy of ID
- Certificate of non-residence in Spain
- Copy of the employment contract
- Copy of the most recent payslips from the country of residence
- Statement of account for the last year of the salary account
- Proof of tax residence
- Last submitted tax return
- last three payment receipts for current loans
- Purchase contract or preliminary contract for the relevant property
- may be ¨translations of the documents
Compare mortgages
The application is made at the place of tax residence. As a foreigner with Spanish tax residence, this is no problem at all: you apply for the mortgage at the bank of your choice. As a foreigner who wants to buy a Spanish property, for example, there is support from a mortgage broker service for non-residents.
Always remember to compare different mortgage offers with each other.
