Mortgages for non-residents in Spain

1.- Financing

Mortgages in Spain have a credit limit for the acquisition of the primary residence equivalent to 80% of the purchase price or appraisal value of the property (whichever is lower). In the case of a second residence – such as one intended for vacation – the amount is usually reduced to 60%. In principle, mortgages for foreigners residing in Spain are subject to these same limits. However, those foreigners who do not reside in Spain will have to assume the limits specific to financing a non-primary residence, as their non-resident status prevents the property from being considered otherwise. Mortgages granted to non-residents may even have the maximum limit reduced to 50%, if deemed appropriate by the bank.

Typically, mortgages are granted in euros, and monthly installments must be paid in euros. However, Spanish mortgage law allows for the mortgage to be switched to the currency in which you receive your income (always in major currencies, such as USD), if the bank approves and grants the loan.

2.- Terms

On the other hand, maximum repayment terms range from 20 to 30 years – exceptionally – provided that the age of the applicant does not exceed 70 years before the mortgage matures. That said, maximum terms for non-residents rarely exceed 20 years.

3.- Interest Rate

Mortgages are offered at both variable rates (based on the Euribor index plus a spread) and fixed rates. The latter option ensures that monthly payments remain constant throughout the contract’s life. The interest rate for mortgages for non-residents is usually around 3% or 4%. However, some institutions may offer to lower the interest rate if other products such as insurance, investment funds, or credit cards are contracted.

4.- Other Expenses

Opening commissions of 0.5% on the loan amount (one-time payment). Exceptional.

What are the requirements?

The requirements to obtain a mortgage for non-residents may vary depending on the bank and the individual circumstances of the applicant. However, some common requirements include:

• Age: >18 years (at application) & <65 or 70 years (at the end of the repayment term).
• Residence: Country of major currency.
• Income: Demonstrate stable and sufficient income to meet mortgage payments.
• Payment capacity: The bank will assess that the sum of your mortgage plus other debts does not exceed 30% of your income.
• Guarantees: Providing real estate guarantees and personal guarantees favor financing conditions; properties abroad are not assets that Spanish banks particularly value due to their inaccessibility.

What documents are needed?

For any bank to approve your application, you will need to submit a series of documents certifying which country you are from, what you do for work, or how much you earn. The documents must be submitted in Spanish. In general, this is the documentation that entities will request:

A copy of your identification documents. The DNI if you are Spanish and the passport and NIE (Foreigner Identification Number) if you are a foreigner.

The tax residence certificate from the country where you currently reside. You must request this from the tax agency of that country.

• A copy of your employment contract and your latest pay stubs. Banks usually ask for the last three pay stubs, but you may need to provide those from the last six or 12 months.
• The income tax return for the last fiscal year.
• Bank statements from the last six months, showing your income, expenses, and the collection of any debts you have. You will also need the account ownership certificate.
• Information about your current assets.
• Your credit report, which is a document listing the bank debts you have at the time of applying for the mortgage. You must request this from the central bank of your country of residence.