Mortgages in Spain - Mortgage Solutions 4 Spain

Overview of the Spanish Mortgage Market

There are an increasing number of different mortgage products available in Spain to non-residents. As in the UK, each lender has different lending criteria, for example with regard to the type of property they will lend on, loan-to-value-ratios, income multiples, term of loan etc.

Key factors which determine the type and size of mortgage you are able to obtain in Spain include:

Your age
Your employment status
Your disposable income
Official valuation of the property (not the asking or purchase price)

As far as age is concerned, most lenders will lend for a maximum of 30 years or to age 75 but there is a main stream lender with competitive products who will lend for up to 40 years or to age 80 and another who offers an 80% loan-to-value mortgage with up to 10 years on an interest only basis. There are currently only 3 self-cert/non-status mortgages available in Spain.

The maximum loan-to-value that a non-resident can obtain is normally 70% but a number of lenders we work with go to 80% of official valuation. At the same time, some lenders are offering interest only periods of 3 years or more - we have one lender that will go to 15 years on an interest only basis.

With regard to mortgage size, in Spain banks use an affordability ratio of between 30-40% of net monthly income, i.e. they will not grant a mortgage where the monthly repayment is in excess of 30-40% of the borrower’s net monthly income after tax.

Finally it is worth noting that two advantages of having a Spanish mortgage are that it will help to reduce inheritance tax in Spain and it will not appear on your UK credit file or affect your UK credit rating.