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Firmalex > Latest posts > How to buy a house in Spain: The mortgage

This article is part of our guide How to buy a house in Spain which you will find in our Real Estate Consulting section.

Once the reservation contract has been signed, it is then up to the buyer to arrange a mortgage, if necessary, although they should have already discussed their needs with the mortgage provider beforehand.

Mortgages in Spain

After the financial crisis of 2008, Spanish banks have been heavily restructured, with significant international involvement of the EU and the IMF.

As a result, banks are approving fewer mortgages and mortgage rates and conditions have become less favourable.

Coverage ratios

In general, non-resident buyers in Spain can enjoy the same mortgage conditions as Spaniards:

– Up to 80% coverage in the case of the first home.
– Between 60 and 70% in the case of a second home.
– In the case of a rural property, you can only obtain a mortgage for 50%.

It should be borne in mind that the value that banks give to a property can be very different from the real market price.

Therefore, it is absolutely crucial that you speak to a bank first before putting down a deposit.

Other parameters

Another thing to bear in mind is that mortgages in Spain are usually contracted for a minimum of 5 years and a maximum of 30, with the maximum age to have paid off the mortgage being 75 years.

In addition, your debt should not exceed 30-35% of your income.

Having a previous property

In Spain, mortgage lenders will not complete a mortgage agreement until you own a property.

For this reason, it is important to include a clause in the contract that allows you to get out of the agreement if you are unable to acquire the mortgage.

Properties abroad

It should also be noted that each institution has its own risk criteria, which may include the country of residence, although properties abroad are not usually accepted as collateral, as they are difficult to reach.

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