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Operated by MPS Property Consultants Calle Voluntario del la Cruz Roja Fuengirola, Malaga. Spain. Email: info@businessforsalespain.com
We have compiled a list of the most common questions asled relating to mortgages in Spain. If you are looking for a Spanish mortgage then you may find that some of your questions have already been answered here. To find out more information get in touch with our Spanish Mortgage experts.
1. How much can I borrow?
Lending in Spain in based on a percentage of the value of the Spanish property you are purchasing. The norm in Spain is for residential properties in urban areas you can borrow between 70% and 80%. Other criteria applies to properties in more rural areas, but expect to get less capital for these properties.
2. What is the interest rate for Spanish mortgages?
In Spain, the interest rate is called the EURIBOR, which is normally around 3.5%. It is based on the European Central Banks' base rate and as a result is subject to change from time to time. Keeping an eye on the European base rate will give you a good idea of the costs and fluctuations you can expect during the lifetime of your mortgage. This will then be reflected in the mortgage interest rate in Spain.
3. How much time can it take to get a Spanish mortgage?
The amount of time the Spanish mortgage process takes is a variable dependent on many factors. The general rule of thumb is that a mortgage application life span is normally completed within 28 days, although in certain cases this can be extended to take circumstances into account. In the same vein this can also be speeded up for extenuating circumstances. Mortgage brokers in Spain usually will try to complete the application in as short a timeframe as possible which is to the benefit of all.
4. What is the cost of arranging a mortgage in Spain?
The commission charged by Spanish mortgage brokers can vary but to ensure you are with a reputable broker you should aim to be paying between 1% - 1.5% of the value of the monies advanced from the mortgage lender. In most cases we charge 1% of the value of the property as the fee for arranging your mortgage in Spain.
5. Who will represent me in the mortgage application, will I need a Spanish lawyer?
The Spanish mortgage process is complicated and requires a thorough knowledge of the banking and notary system to ensure a clean and correct application is being filed and will be approved. Hiring a Spanish lawyer who has good English can be very important to your application as they will know far more than you about the process. Another advantage of having a good Spanish lawyer is they will have the power of attorney to sign documents on your behalf at the notary, especially useful if you are a property investor and can not be in the country at the time.
6. If I get a mortgage in Spain, will I need life insurance or some other type of cover?
In Spain it is not necessary to have life insurance when acquiring a mortgage although it certainly never hurts to acquire some form of life cover to protect your family in the event of an unforeseen event.
7. If I decide to pay off my Spanish mortgage early, what will it cost me?
This is an important question as it can often decide the choice of lender you will make. Each mortgage lender in Spain has different criteria relating to this. Some lenders will charge you only if you repay the mortgage in the first 5 years, others will charge you nothing. The most common case is you will pay around 1% of the amount advanced for early repayment of the mortgage.
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