Spanish Mortgages, a brief guide
Spanish Mortgages – a brief guide
Getting a Spanish mortgage and useful information about getting a mortgage in Spain:
Can I get a Spanish Mortgage?
Yes, foreign nationals can obtain a Spanish mortgage for the purchase of a home in Spain. We will be happy to obtain a mortgage quote for you.
How much can I borrow?
Typically, Spanish Banks will lend up to 70% of the value of the home to foreign nationals. We have a preferential arrangement with our banks to lend up to 80% of the value of the home to our clients. As with all mortgages, offers are subject to your financial status.
How is the value of the home calculated?
The bank will carry out a valuation of the property. This typically costs around 300€ and you will be expected to pay this at the outset.
Can I mortgage the IVA (VAT), fees and legal costs?
No. You should allow for the 10% costs from the cash you have available. The banks only lend against the value of the home.
Over what period can I borrow the money?
Mortgages are available for periods of up to 25 years. In special circumstances this can be extended to 30 years.
Up to what age can mortgage repayments be made?
Spanish banks will allow mortgage repayments up to the age of 70, although our advice is to treat 65 as a sensible upper limit.
Can I borrow the staged payments for an “off plan” home?
No. The bank will normally only release funds for a completed home that it can value. Under these circumstances we will ask the developer to allow a 20-30% deposit to be paid on contract, with the balance being paid via a mortgage on completion. This relieves the need for the interim payment.
Are Spanish mortgages cheaper than those in the UK?
Yes. Spanish interest rates are usually lower than the UK. This makes monthly mortgage repayments more affordable.
What does a typical mortgage cost a month?
It is difficult to generalise, but there is a simple rule of thumb:
For every 100,000€ (£67,500) borrowed over a 25 year period, the monthly repayment would be approximately 560€ (£380) per month.
* This assumes an interest rate of 4.1%
How are Spanish mortgage rates calculated?
All Spanish mortgages track EURIBOR (the European Interbank Offered Rate). This is similar to the UK Bank of England base rate and is Europe wide. Typically, Spanish mortgage interest rates track slightly above over the current EURIBOR rate.
I have seen some very low interest rates. Is there a catch?
Some mortgage lenders advertise very low interest rates. You should be aware that this is only for a short period, after which the rate will track EURIBOR like all other mortgages. These lenders will often offset this lower rate with a higher arrangement fee at the outset.
What is an acceptable arrangement fee?
Example : the Bank of Valencia charges a 1% arrangement fee, based on the value of the loan.
What personal documents will I have to provide?
You will have to complete an application form and provide your passport or identity card. You will also be asked to provide recent bank statements.
For those who are employed by a company you will be asked for your recent payslips and your P60. In some cases you may be asked for your tax return.
If you are self employed you will be asked for your annual tax return, profit and loss statements for the last two years and certified business accounts.
If you are a pensioner you will be required to prove your income with your pension details or certificates and your annual tax return.
What information on the home will I have to provide?
Your lawyer will obtain all the necessary documents from the developer and issue them to the lender.
Contact Girasol Homes for more information and the latest rates available
0044 1974 299055 / fax 0044 8701 290892 or email info@girasolhomes.co.uk
Girasol Homes is registered at Cotfield House, Matford, Exeter, Devon, UK, EX2 8XR.
Registration Number 5974487
