Planning to buy a property in Spain? You may need a mortgage to buy your dream home in the sun. Yourspanishmortgage.co.uk works with specialists to confirm your borrowing limits and rates and help you navigate the Spanish property market safely.
We identify borrowing amounts, as well as what lending criteria and deposit requirements you may have to meet. We also explain how buy-to-let properties work in Spain, and whether remortgaging is different from the UK too.
In this article:
- Can UK residents get a mortgage in Spain?
- Is it worth getting a Spanish Decision in Principe?
- What are the Spanish lending rules, criteria and deposit requirements?
- Is a Spanish mortgage or a Spanish property safe?
- Which lenders offer Spanish mortgages?
- Can you let out your Spanish holiday home to help with costs?
1) Can UK residents get a mortgage in Spain?
Yes, absolutely. There are not many UK lenders offering mortgages for a property purchase in Spain. Some Spanish lenders accept applications from British people. A Spanish mortgage broker can be beneficial as they’ll have in-depth knowledge of this area of the market. You would also benefit from instructing a specialist lawyer to help you through other aspects of the purchase as there are many differences between UK and Spanish property law.
If you secure a mortgage from a Spanish provider, fixed and variable rates are available. You may find fixed-rate deals, but if not, your product will typically be linked to Euribor (Euro Interbank Offered Rate). These mortgages are generally repayment products too.
2) Is it worth getting a Spanish Decision in Principle?
Yes. A huge number of buyers lose properties because they do not have the finance in place.
It is important to get a mortgage in principle in place before you submit an offer to buy a Spanish property.
3) Rules, lending criteria and deposit requirements for Spanish providers
In general, Spanish providers have sapproach applications similarly tonders. However, due toaserseas applicant, you may find that for sof their eligibility criteria, theyore stringent in thh we explore below..
Ru.s and affordability
Just Likehe UK, Spanish mortgage lenders will conduct an affordability assessment to help determine how much they will extend. They often calculate a debt-to-income ratio too, to ensure that your regular outgoings don’t go above 35-40% of your net monthly income after your mortgage payment has been made.
4. Is a Spanish mortgage or a Spanish property safe?
Spain has a very seproperty purchase system using ‘sellerseller reservation agreementsyou decide to buy a property and a price is agreed you will have to enter into an ARRAS contract. You typically put down a 10% deposit and agree to complete within two months. Unlike the UK system, if the seller pulls out, they have give you double the ARRAS amount back.
All property completions are done through a Spanish notary and sent to the registry. This process is even safer when you take a mortgage because the lender will ensure the property is legal and properly registered and that it values up. The banks bank’s agents will also doubledouble-check thatroperty is correctly registered and all costs are settled.
In short, the banks oversee the security of the transaction between the buyer and seller.
5) Which lenders offer Spanish mortgages?
Santander, UCI and CajaSur are three options for banks in Spain you could approach. However, there are many more, all of which have their own lending requirements. To ensure your application is successful, it can be helpful to seek the help of a broker who will know which products you are eligible for and with whom.
6) Can you let your Spanish holiday home to help with costs?
Spanish mortgage lenders prefer urban properties designed for residential use, but they can also fund homes and investment properties.
You will typically be allowed to let properties while you are not staying at the property. Some lenders offer Spanish buy-to-let mortgages.
Featured picture of Ibiza credit to Alexander Schimmeck.
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