Buying property in Spain as a foreigner is an exciting investment opportunity, and securing a mortgage can help make it more accessible. Spanish banks offer financing options to international buyers, but there are specific requirements, interest rates, and loan conditions to consider. Here’s a comprehensive guide to obtaining a mortgage in Spain as a foreign buyer.

1. Can Foreigners Get a Mortgage in Spain?

Yes, Spanish banks provide mortgages to non-residents, though the terms differ from those offered to Spanish citizens. Foreign buyers typically receive:

• 60-70% Loan-to-Value (LTV) for non-residents.
• Up to 80% LTV for EU residents with Spanish tax residency.
• Loan terms ranging from 5 to 30 years.
• Interest rates that can be either fixed or variable.

2. Types of Mortgages Available in Spain

• Fixed-Rate Mortgage: The interest rate remains constant throughout the loan term, ensuring predictable repayments.
• Variable-Rate Mortgage: The interest rate is linked to the Euribor and may change annually.
• Mixed Mortgage: Combines a fixed rate for an initial period, then switches to a variable rate.

3. Spanish Bank Requirements for Foreign Buyers

To apply for a mortgage, you will need:

• NIE Number (Número de Identificación de Extranjero) – A tax identification number required for any property transaction.
• Proof of Income – Payslips, tax returns, or business records for self-employed individuals.
• Credit Report – Banks will check your financial history from your home country.
• Bank Statements – Typically, last 3-6 months showing income and savings.
• Deposit Payment – A minimum of 30-40% of the property value is required upfront.
• Property Valuation – The bank will conduct an official appraisal to determine the loan amount.

4. Interest Rates and Mortgage Costs

• Fixed rates typically range from 3-5%.
• Variable rates fluctuate based on the Euribor, with margins between 1-2%.
• Additional costs:
  • Mortgage arrangement fee: 0.5% – 1.5% of the loan amount.
  • Property valuation fee: €300 – €800.
  • Notary and legal fees: Around 1-2% of the purchase price.
  • Stamp Duty (AJD): Varies between 0.5-1.5%.

5. Steps to Getting a Spanish Mortgage

1. Research lenders – Compare mortgage offers from Spanish banks and international lenders.
2. Obtain an NIE Number – This is mandatory for all property buyers in Spain.
3. Get a Pre-Approval – Helps you understand your borrowing power before house hunting.
4. Choose a Property & Make an Offer – Once accepted, a deposit (reservation fee) is required.
5. Apply for the Mortgage – Submit documents for approval and wait for bank processing.
6. Property Valuation – The bank will assess the property’s value before confirming the loan amount.
7. Sign the Mortgage Deed – This is done before a notary, along with the final property purchase agreement.
8. Register the Property – Once the transaction is complete, register the property in your name.

6. Final Thoughts

Securing a Spanish mortgage as a foreigner is a straightforward process if you meet the bank’s criteria and have the necessary documentation. Whether you opt for a fixed or variable rate, understanding the mortgage terms and hidden costs is key to making a sound investment. If you’re considering buying a property in Spain, working with a mortgage broker or legal expert can help simplify the process and secure the best loan terms for your needs.