Dream Casa Spain » Mortgage loan

Mortgage loan for a foreigner

Dreaming of buying a property in Spain but lacking the funds to finance the entire transaction? A mortgage loan could be the solution to fulfilling your dream. Foreigners who are not residents of Spain can apply for a mortgage, although the process differs from that for Spanish citizens. Who can apply for a mortgage in Spain? Spanish banks grant mortgages to foreigners, both residents and non-residents. However, the terms and conditions applicable depend on several factors, including residency status, financial situation, and credit history in the home country.

Mortgage loan conditions for foreigners

1. Loan Amount: Banks typically offer financing up to 60-70% of the property value for non-residents, while residents can expect loans up to 80% or even 90%. This requires a 30-40% down payment.

2. Income and Creditworthiness: A key element in assessing an application is the applicant's financial situation. Banks consider income, employment, savings, and credit history in their home country. For non-residents, banks may require documents confirming financial stability, such as tax returns, employer statements, or documents regarding other assets.

3. Property Type: Banks prefer highly liquid properties, such as apartments in large cities or tourist properties, that can be easily rented or sold. Loans for the purchase of agricultural land or other riskier investments may have higher requirements.

4. Loan Interest Rate: Mortgage interest rates in Spain are variable and may depend on the reference rate (e.g., Euribor) and the bank's margin. Non-residents may receive a slightly higher interest rate, depending on their credit risk, but this ranges from 2-3%, which is very advantageous.

Required documents

To obtain a mortgage in Spain, you will need to provide a number of documents.

These include:

1. Identification document (passport or ID card).

2. NIE number (Número de Identificación de Extranjero) – necessary to complete all formalities in Spain, including concluding a loan agreement.

3. Proof of income – depending on the situation, this may include employment certificates, tax returns, or documents regarding other sources of income.

4. Credit check (BIK) certificate – for non-residents, banks may require proof of no financial arrears in their home country.

5. Real estate documents – preliminary agreement, notarial deed, or other documents related to the transaction.

Credit costs

It's worth remembering that, in addition to the mortgage itself, there are additional costs associated with it, such as:

• Notary fee – related to signing the contract

• Tax on legal transactions – the so-called Impuesto de Transmisiones Patrimoniales

• Property valuation fee – banks often require the property to be valued by an independent appraiser

• Property insurance – banks may require the property to be insured for the entire loan term.

Summary

For foreigners, purchasing property in Spain with a mortgage can be an attractive option. Despite economic changes, the Spanish real estate market continues to attract investors from around the world. A mortgage is a way to spread the cost of purchasing a property over time, which can allow you to finance your dream home, apartment, or investment. A mortgage in Spain is a real possibility for foreigners, but it comes with certain requirements, such as a sufficient down payment, a good financial situation, and the submission of the necessary documents. With the help of our real estate professionals, you can go through the entire process with minimal stress and the confidence that all formalities will be handled correctly. Want to learn more about mortgages or get help with purchasing property in Spain? Contact us and we will help you step by step!