Getting a mortgage in Spain involves strict regulations, whether you’re a resident or non-resident. Here’s a clear breakdown of the process:
📌 1. Check Your Eligibility
✅ Basic Requirements:
- Residents:
- Permanent work contract or stable income (self-employed must show 2+ years of activity).
- Clean credit history in Spain (no defaults in ASNEF/RAI).
- Non-Residents:
- Provable income in your home country (payslips, tax returns).
- Higher down payment (40-50% vs. 20-30% for residents).
📉 Maximum Debt-to-Income Ratio:
- Banks typically approve installments that don’t exceed 30-35% of your net monthly income.
📌 2. Compare Banks & Mortgage Offers
🔍 Key Factors:
- Interest Type: Fixed (2.5-4%), variable (Euribor + spread, e.g., Euribor +1%), or mixed.
- Loan Term: Up to 30 years (40 for borrowers under 35 with some banks).
- Fees: Arrangement (1-2%), early repayment (0.5-2%).
💡 Tip: Use comparison tools like HelpMyCash or iAhorro to analyze offers.
📌 3. Get Pre-Approved
📋 Required Documents:
- Residents:
- DNI/NIE, last 3 payslips, tax return, employment contract.
- Non-Residents:
- Passport, income proof (translated & apostilled), credit report from home country.
🔄 Process:
- The bank assesses your profile and issues a pre-approval letter (valid for 3-6 months).
📌 4. Property Search & Due Diligence
🏠 Property Requirements:
- Must be a primary residence (banks rarely finance 100% for second homes).
- Mandatory bank appraisal (cost: ~€300-600, paid by buyer).
- Ensure no liens or debts (a notary checks the Land Registry).
📌 5. Sign the Mortgage Before a Notary
📜 Final Steps:
- Sign the purchase deed (buyer, seller, and notary).
- Sign the mortgage deed (bank transfers funds to the seller).
- Register at the Land Registry (takes 2-4 weeks).
💰 Closing Costs (8-12% of property value):
- Transfer Tax (ITP): 6-10% (resale) or VAT 10% (new build).
- Notary & Registry Fees: ~€1,000-2,000.
- Arrangement Fee: 1-2% of loan amount.
📌 6. Start Repayments & Insurance
💳 Monthly Payments:
- Automatically debited from your account.
- Mandatory Insurance:
- Home insurance (fire/damage coverage).
- Life insurance (often required).
⚠️ Key Considerations
✔ Non-Residents: Some banks require a Spanish salary account (e.g., Santander, BBVA).
✔ Euribor: If choosing a variable rate, check trends (currently ~3.5% in 2024).
✔ Re-mortgaging: Possible after 1-2 years to improve terms.