To get a mortgage in Spain, I recommend that you check out two things:
- Idealista’s mortgage simulator
- Idealista’s mortgage comparison engine
- FBW article to determine whether you should get a mortgage in Spain (70% LTV), or in your home country (100% LTV)
Buying Real Estate in Spain
Before we talk about how to get a mortgage in Spain, here are some key elements about the Spanish real estate market. Real estate prices in Spain decreased significantly from 2008 to 2014. Since, they went up, so you may want to invest in Spanish property now.
Especially as the price per square meter in many cities or regions are still relatively cheap. A few examples:
- Madrid: 3.000€ per square meter
- Barcelona: 3.400€ per square meter
- Valencia: 1.400€ per square meter
- Alicante 1.500€ per square meter
- Costa del Sol: 2k€ to 3k€ per square meter
- Costa Blanca: 1k€ to 2k€ per square meter
How to Get Financed to Buy a Property?
Unless you plan to buy all-cash, financing is the 1st thing you should do, BEFORE browsing properties. Ideally, the real estate agent should be able to give you the name of a few bankers to help you get a mortgage. However, here is an article to help you.
Mortgage Conditions in Spain
When I bought a property in Spain (read my story here), I took a mortgage in Spain.
Loan to Value (LTV): 60% to 80%
“The biggest difference between residential and non-residential loans is the maximum loan-to-value (LTV) that banks will allow. Residents can generally borrow up to 80% of the property’s assessed value whereas non-residents are limited to 60–70% LTV. ” – Expatica.com
In my case, the bank financed 70% of the loan to value.
Interest rates
The number of mortgage approvals is finally starting to grow, after 7 years of crisis. Over 1.1 million mortgages were approved in 2004, while in April 2019 banks approved only 30,000 credits to property buyers. Indeed, this shows that the current trend is 360,000 mortgages approved per year, which is close to 4 times less than in 2004.
Most of this is linked to the crisis which happened in 2007 (read more here). Because of that crisis, most people are now opting for fixed interest rates, because variable interest rates can be risky.
Spanish Banks
Most of the larger Spanish banks offer mortgages to non-residents, most notably Banco Santander Central Hispano, Banco Bilbao Vizcaya Argentaria (BBVA) and CaixaBank. For the best information about mortgages in Spain, check Idealista’s website where you will find information about interest rates, per bank.
Don’t Miss our Category Dedicated to Mortgages in Spain
More importantly, make sure you check our category dedicated to mortgages in Spain. In this category, you will find articles answering most of the questions you have.