3.5.2. Mortgages from Spanish banks

If you are considering buying or investing in property in Spain and require a mortgage, you may be able to apply for a mortgage with a Spanish bank.

Fierce competition between banks in Spain has kept interest rates much lower than the UK and though lending is at an all time low, foreign investors are warmly welcomed.

Interest rates are usually variable and based on the annual Euribor, with your repayments being reviewed annually and will go up or down depending on the Euribor rate. Banks will often require a fixed rate period of 6-12 months at the start of the term.

Most banks will offer between 60-80% of the total price of the property, based on the lower of the valuation and the purchase price, with some banks offering up to 100% mortages over 5-20 years. The current variable rate is 4,7% with a write off fee at around 1%. 

Your mortgage shouldn't be over 35% of your net monthly income after tax. All your wordly debts ( other mortgages, loans, credit cards, compulsory monthly payments, rent and school fees will be taken into account. The bank will consider your current and future liabilities, as well as your income and any investments.