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Spanish
Mortgages for property purchase
Lending criteria does not vary much between the Banks here and the variety of mortgage products is less than you will find in the UK or Ireland. If you have any specific requirements however we will try and find the most appropriate lender.
As a general rule for non-residents they will normally lend a maximum of 80% of purchase price over a maximum term of 25 years perhaps 30 years depending on the age of the applicant, on a repayment type mortgage i.e. capital and interest repayment. They would expect the mortgage to be repaid by around 70/75 years of age. Monthly repayments would be approximately 11.06 Euros for every 1000 Euros borrowed over 10 years, 8.31 Euros for every 1000 Euros borrowed over 15 years, 6.98 Euros for every 1000 Euros borrowed over 20 years, 6.22 Euros for every 1000 Euros borrowed over 25 years, and 5.74 Euros for every 1000 Euros borrowed over 30 years. Interest only mortgages are available but the terms are a little more restrictive. Banco Halifax Hispania will lend up to 70% over a 15 year maximum term and Bankinter will go to 30 years but will only lend up to a maximum of 60%. Other Banks will lend on an interest only basis but only for the first 1-3 years. Monthly mortgage repayments should not exceed 33% of total net monthly income. Interest rates are presently around Euribor plus 1%-1.5%. It is not possible to say what rates will be in the future but presently this would work out at about 5.5% There are costs associated with a Spanish mortgage. These costs will be based on the amount borrowed but as a rough guide you should budget for 5% of the amount being borrowed. This is to cover the Banks arrangement fee, legal and tax costs. This is in addition to the 10% costs we ask you to budget for relative to the actual purchase of the property. The Bank will wish to see proof of earnings i.e a copy of the last P60 plus copies of the last 3 salary/wage slips or if self-employed copies of the last 2 years accounts and a copy of the last tax return. Pension, property rental and disability income can also be used to support a mortgage application. There is normally an early redemption charge of 1% on the amount being repaid. This is valid for the life of the mortgage. In terms of an application a note of your requirements together with proof of earnings will be sufficient. This can be arranged whilst in Spain or sent to us at a later date and our financial advisor will organise the application with the Bank.
You will also need to open a Spanish Bank account. Should you decide on a Spanish mortgage this can be arranged with the Bank providing the mortgage.
Overseas Property Shop are available to help you call 01572 821881 for more details.
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terms and conditions| Overseas Property |