Living in Spain: All about mortgages

Living in Spain: All about mortgages

Do you dream of your own home under the Spanish sun? A mortgage in Spain makes your dream of a second home or investment property a reality.

Why a mortgage in Spain?

When you take out a mortgage in Spain, you don't have to pay the full purchase price upfront. Spanish banks allow you to finance up to 70% of the property's value, allowing you to build your Spanish home with a realistic down payment.

The Spanish mortgage system differs from the Dutch one. Dutch banks can finance up to 100%, while Spanish banks have stricter requirements. Your income largely determines the maximum mortgage, with Spanish banks also considering your age and creditworthiness. If you are 75, your mortgage in Spain must be paid off. These specific rules require preparation and knowledge of local laws.

With the right guidance and documentation, the mortgage application process in Spain becomes clear and feasible.

The 7 most important rules for a mortgage in Spain

1. NIE number required

Without an NIE number, you cannot get a mortgage in Spain. This Número de Identificación de Extranjero serves as your tax number and identification for all financial transactions.

2. Minimum 30% of your own money

As a foreigner, you can take out a mortgage of up to 70% of the property's value, meaning you must contribute at least 30% of your own funds. If you are a tax resident in Spain, this can increase to 80%. Keep in mind that the buyer's costs (13 to 14.5%) are not included in the financing. The total contribution for non-residents therefore amounts to 43 to 44.5% of the property's value.

3. Income and payment capacity

Spanish banks have a rule that a maximum of 30 to 35% of your net income may be spent on housing costs. This applies to combined housing costs in both the Netherlands and Spain. If you already have a mortgage in the Netherlands, it will be included in the calculation.

4. Age and term

Banks in Spain offer financing up to your 75th birthday. If you are 60 at the time of application, the maximum term is 15 years. This allows younger buyers to benefit from terms of up to 25 years, resulting in lower monthly payments.

5. Required documentation

To apply for a mortgage you need the following:

• -Passport
• -recent six-month pay slips
• -IB returns
• -Bank statements
• -Proof of address and a BKR extract

Documents must be submitted in Spanish unless you are working with a specialist mortgage advisor.

6. Buyer's costs

Buying a house in Spain involves buyer's fees averaging 13 to 14.5% of the purchase price. These include notary fees, registration fees, mortgage deed registration, and property transfer tax (for existing properties) or IVA (VAT for new construction).

7. Mandatory home appraisal

Spanish banks require a mandatory appraisal by a certified appraiser. The maximum mortgage depends on the lower of the purchase price and the appraisal value. This prevents over-financing.

Frequently Asked Questions (FAQ):

• Can I get a mortgage in Spain as a Dutch citizen? Yes, as a Dutch citizen, you can get a mortgage in Spain. You will need a NIE number and must meet income requirements.
• Is my Dutch mortgage included in the calculation? Yes, Spanish banks take your existing housing costs in the Netherlands into account. The 30-35% income rule applies to the combined housing costs in both countries. This affects the maximum amount you can borrow for your Spanish home.
• Do I need to speak Spanish to get a mortgage? No, that's not necessary. By working with a specialized mortgage advisor who speaks Dutch and Spanish, you can complete the entire process in Dutch. The advisor will handle communication with Spanish banks and translate your documents.

Ready to find your dream home in Spain? We'll help you find and buy your ideal property.

View the CasaLasDunas properties on offer here and take the first step towards your new home under the Spanish sun today.

Discover more:

• Investing in a home
• Buying agent Spain
• Buy a holiday home in Spain

Disclaimer

The information in this blog is intended solely for general information purposes about mortgages in Spain. While we strive to keep the content up-to-date and accurate, we cannot guarantee the completeness, accuracy, or reliability of the information provided. CasaLasDunas is not a financial, tax, or legal advisor. Therefore, always verify the information yourself and seek advice from a certified mortgage advisor, tax specialist, or lawyer. Upon request, CasaLasDunas can connect you with Dutch-speaking specialists with experience in financing and real estate in Spain.