Mortgages in Spain: A Guide
Why baydonhill international mortgages?
  • Unique market knowledge
  • Multilingual team
  • Established relationships with banks
  • Proven track record of success
  • Personal attention

A step by step guide to buying a house in Spain with a Spanish Mortgage

  1. Find out how much you are eligible to borrow by completing our quotation request form
  2. Instruct Baydonhill International Mortgages to obtain an ‘Agreement in Principle’ on your behalf
  3. Go to Spain and find a suitable property
  4. Obtain an NIE Number
  5. While in Spain, sign a sales agreement (Contrato de Compraventa) & transfer the deposit with Baydonhill Foreign Exchange to secure the property
  6. Submit a copy of the signed sales agreement to the lender
  7. Lender instructs valuation
  8. Lender issues mortgage offer
  9. Arrange buildings insurance.  This can be provided by Baydonhill Insurance division
  10. Transfer balance with Baydonhill's currency division
  11. Arrange monthly mortgage payments with Baydonhill International Payment Plan
  12. Completion

Eligibility & criteria

Mortgages are now available in either Sterling or Euros and will be secured on your Spanish property. All mortgages are full status and proof of income and outgoings will be required. Please contact us for further information.

The maximum loan to value available is 80% of the value of the property and some lenders will include fees.  Our minimum loan amount is €80,000. 

Spanish lenders assess eligibility on the applicant's capacity to repay the loan.  As a guideline, your existing monthly outgoings and the repayment on your Spanish mortgage should not exceed 35% of your net monthly income.  A percentage of rental and investment income can also be considered. Mortgage, rent, personal loans, credit card payments and maintenance commitments are considered as outgoings. Sterling mortgages secured on Spanish property are calculated using income multiples.

Types of mortgage

Mortgages can be obtained for the purchase of off-plan, new or existing properties and properties on Leaseback schemes.

Spanish lenders will consider applications in the name of an English or Spanish Company.  This is not widely available and will be at the lender’s discretion.

For construction loans, plans must be provided at the time of application. Funds will be released by the lender directly to your builder in accordance with the plans and following the bank’s valuation to ensure the agreed stage has been reached.

Capital raising is available on your property in Spain and the amount you can borrow will be determined by a valuation arranged by the lender.

Remortgaging is available. We recommend that you check with your existing lender if any penalties will be payable for cancelling your existing mortgage. We are now able to offer a new product where the lender will cover the Notary’s fees and pay up to 0.5% towards any early redemption penalty charged by existing mortgage provider.

Mortgage products

A variety of products are available ranging from interest-only to repayment mortgages on a variable or fixed-rate basis or a combination of both.  Terms can be from 5 to 40 years.  However, loans must be repaid by 80 years of age.  Many of our products do not have any early redemption penalties.

Timeframe

An ‘Agreement in Principle’ can be obtained from a lender once all the requested documentation has been submitted. This takes approximately 5 working days.

A minimum of 6 weeks should be allowed from application to completion.

Documentation required by the lender for full status mortgages

  • Proof of identity & residence
  • Proof of income & outgoings
  • Bank statements
  • Property details

Life assurance

Life assurance is strongly recommended but not obligatory.

Organising payment of your Spanish mortgage

Please be aware that missing a monthly mortgage payment may have serious consequences and we therefore strongly advise participation in our overseas payment plan. This service gives you peace of mind in the knowledge that your Spanish mortgage repayments will be met automatically each month.

Buildings insurance

Buildings insurance is mandatory and needs be in place for completion. Most lenders offer their own buildings insurance and if their provider is not used, they will require proof that the policy has been assigned to them. Baydonhill Insurance can provide you with a quote for this.

Bank account

All lenders will require you to have a Spanish account, many may insist you open an account with them.

Completion

Mortgage funds will be released by the lender to your Notary for completion of the purchase.

 

 

Costs of setting up a Spanish mortgage

Bank’s arrangement fee – typically this is 1% of the loan amount and will be deducted from the loan.

Valuations – these are required by all lenders.  The cost varies from lender to lender and is dependant upon the size of the property.   Please refer to your personalised quotation for an estimate.

Estate Agent’s fees – in some cases these can be included in the loan amount.

Notary Fees – these are fixed by law and are based on a sliding scale.  If you take out a Spanish mortgage, a further cost will be passed on to you by your Notary for registering the charge of the lender with the land registry.

Baydonhill charges a non-refundable application fee of £200.  A further fee may be payable on completion of the mortgage.  Please refer to your personalised quotation for confirmation.

Legal & Tax

We recommend that professional legal & tax advice should be sought to protect your own interests.