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MORTGAGES AND FINANCE

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Arranging the finance to purchase your property in Spain is not as different as it may first seem, many estate agents work as introductory agents for many leading financial institutions and they will be able to arrange a meeting to help you set-up a bank account and discuss the possibilities of obtaining a mortgage to finance your purchase.

Mortgages are readily available to both residents and non-residents in Spain through all of the major banks. However its worth speaking to more than one bank and not just the first one you are introduced to. As a non-resident you can normally borrow up to 60% of the value of the property and as a resident normally up to 80%.

Interest rates in Spain like the rest of Europe are relatively low so borrowing money can be very affordable, but many people often prefer to use the equity they have in their home to finance their purchase abroad. This has some advantages over a mortgage in Spain as unless you have an income from your property in Spain you will need to continuously move funds over to your Spanish account to keep up the mortgage repayments.

Obtaining a mortgage in Spain is usually preferable if you are planning on letting your property as the mortgage payments can be tax deductible, furthermore with your income being paid into a Spanish Account you won't have to worry about transferring the funds from your country of origin.

There are costs associated with obtaining a mortgage, and the amount you can borrow is based on a percentage of the banks valuation of the property and not the agreed purchase price. Therefore it can be worthwhile to obtain more than one valuation. The costs are approximately as follows:

• Approximately 250 Euros for the valuation.
• Mortgage opening commission (approx 1%)
• Insurance, varying from 100–300 Euros per year.
• A fee for the Notary & Registration of the mortgage.

Interest rates are exceptionally good in Spain at the moment therefore repayments are low and the value of Property continues to increase at over 10% per year and often as high as 15%. Furthermore you can supplement this by letting your property either on short-term holiday lets or long-term to residents.

Disclaimer: Casa Quest has made every effort to ensure that all the information provided is accurate. However, it is not intended to be a substitute for professional or legal advice. Regulations and laws do change and therefore Casa Quest cannot accept responsibility for any loss or damage caused by any actions, taken or not taken, as a result of using the Casa Quest website or acting on the information contained within.