Mortgage Solutions
Buying a Property in Spain: Mortgage Guide
Many prospective buyers ask whether it’s possible to get a mortgage to purchase property in Spain. The answer is yes, and this guide explains the banks’ loan criteria, the application process, and what you need to know before you buy.
How Much Can I Borrow?
The percentage of the property cost that a bank will lend is called the Loan-to-Value (LTV) ratio. It is based on the lower of the property’s valuation or purchase price:
Non-residents: Maximum LTV is typically 60–70%, depending on property price and financial profile.
Fiscal taxpayers in Spain: Maximum LTV can go up to 80%.
Can I Afford It?
Spanish banks consider your Debt-to-Income (DTI) ratio when assessing affordability. Typically, around one-third of your net monthly income should cover existing debts, rent, and the new Spanish mortgage.
Other Costs
Buying a property in Spain comes with additional costs, usually 9–13% of the purchase price, depending on the region. These include taxes and mortgage setup fees. Banks usually require proof that you have funds to cover these costs before approving the mortgage.
Mortgage Approval
It is advisable to obtain mortgage approval in principle before starting your property search. This helps you:
Set a realistic budget for your property search
Strengthen your position in negotiations, showing vendors you are serious
Types of Mortgages
Variable Rate
Linked to the Euribor plus a margin (e.g., Euribor + 1.5%).
Monthly repayments fluctuate with Euribor movements.
Fixed Rate
Fixed interest rate for the entire mortgage term.
Offers repayment certainty, but typically comes at a higher margin than variable rates.
Note: Buy-to-let or interest-only mortgages, common in the UK, are generally not offered by Spanish banks. Rental income is not considered in your DTI calculation.
How to Apply
While you can apply directly at a Spanish bank branch, using a licensed mortgage broker often gives better access to deals and expertise. Brokers help:
Identify suitable banks based on your financial profile
Prepare and present required documentation
Keep you updated throughout the process
Recommended Broker: Mortgage Direct
Murcia Villas collaborates with Mortgage Direct, operating in Spain since 2006 and officially licensed by the Bank of Spain. They are independent, experienced, and provide premium service throughout the mortgage process.
Mortgage Application Process
Case Assessment
No-Obligation Quote
Administration Fee
Supporting Documentation
Approval
Initial Approval Fee
Property Valuation
Completion
Share financial details via Mortgage Direct’s online Affordability Check.
Additional documentation can be emailed or discussed directly with your adviser.
Receive a quote outlining mortgage terms, fees, and taxes.
No fee or obligation to proceed at this stage.
Payable if you decide to proceed, covering multiple applications if needed.
Money-back guarantee if Mortgage Direct cannot secure a mortgage.
Submit required financial documents.
Open a Spanish bank account and appoint a lawyer before paying a deposit.
Obtain your NIE number (foreigner identification number).
Bank approves or declines the mortgage subject to property valuation.
Fixed percentage of the mortgage, payable before the valuation.
Conducted by an approved valuer (you may select the valuer under new legislation).
Payment must be made before the valuation is carried out.
Final arrangements are made once funds are in place.
Completion occurs at a notary office; either you or your legal representative must attend.
After signing, cheques are distributed, keys handed over, and the mortgage process is complete.
Keeping You Informed
Mortgage Direct stays in contact throughout the process, explaining each step and liaising directly with the lender—an advantage only licensed brokers can provide.
Interested in a free, no-obligation mortgage quote?