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Welcome to The English Speaking Mortgage Brokers in Spain page.
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Looking for a Mortgage in Spain? You can find information about getting a Mortgage in Spain on this page.
Mortgage in Spain, many of us are interested in a mortgage on a holiday home in Spain.
Getting a mortgage and buying a property in Spain is proving more popular than ever, thanks to the urge to escape to the sun and the arrival of low-cost, no-frills airlines.
The two most popular Mortgages in Spain are:
Fixed rate mortgage: the interest rate is fixed at the start of the mortgage. The periodic amount for the payment of principal and interest will not change during the term of the mortgage.
Keep in mind that with this type of interest we are aware of the amounts we will be paying until the mortgage term is finished, however, we don't know whether the interest rate level will be reduced in the market or not.
Variable interest mortgage: The interest rate on your mortgage will be adjusted up or down according to current interest rate levels. The periodic amount for your principal and interest payment will go up or down with these rate changes depending on the index set chosen (such as MIBOR).
The initial interest will be initially lower. The banks normally use this tool to make the mortgage offer more attractive, later on this interest may convert into an excessively high interest
Now is a good time to buy in Spain as European interest rates are low and there is a wide selection of properties available, from apartments on developed plots, farmhouse (fincas) and village locations, through to villas and townhouses.
Mortgages must be formalized in a public deed of mortgage before a Public Notary . The property must be registered at the Property Registry with the name of the owners whom the mortgage is given to.
The mortgage shall also be registered at the Property Registry to evidence that it is a preferential charge in the property. A non-registered mortgage is an ordinary loan and therefore does not constitute a preferential charge on the property.
Although Spanish Law allows the re-mortgage of a property, however, the banks refuse to re-mortgage this because the guarantee corresponding to the first mortgage is preferential over the second one.
This is the normal way to finance a property in case one does not have the full amount of the purchasing price at the moment of the signature of the sales contract before a Spanish Notary.
The mortgage is a contract between lender and borrower to assure the borrower will repay the debt, otherwise he will lose the property pledged. On mortgaging a property, the loan is secured on the property.
Key Points For Mortgage Seekers:
You can choose a Spanish bank or a British bank to provide your mortgage.
Depending on who funds your mortgage, your mortgage can be in Euros or British Pounds. Some lenders, such as Abbey and Barclays, allow you to choose which currency your mortgage will be in.
Equity release from your existing home in the UK can be useful. You will then pay your mortgage in Pounds at a UK interest rate. Eurozone interest rates are considerably lower than British rates - a Euro mortgage will cost you less. (Interest rates in the Eurozone have historically tended to be lower than in the UK.) Most Spanish banks require that you contribute 20 to 30 percent of the cost/value of the property and they will provide a mortgage for 70 to 80 percent of the cost/value of the property.
If you intend to live in Spain and the house you are buying is to be your main residence, you will usually not need as big a deposit as a buyer who is buying a second home will. In the banks' eyes, people are more likely to default on an overseas second home than they are on their principle residence.
How Much Can I Borrow in Spain?
In the UK, mortgages are commonly based on a multiple of your income - for example mortgages to the value of three times your annual income are very common. A recent trend, as property prices have become increasingly unaffordable in many areas of the UK, is for banks to lend higher multiples - such as four or five times your gross annual income, provided you have a secure, relatively high, income
Most Spanish-based lenders do not provide mortgages based on an income multiple. Instead, they compare your repayments with your income. They work on the principle that your mortgage repayments should be no more than one-third of your income. A higher mortgage than this may be offered if you have excellent prospects of increasing your current income or if you have an excellent credit history or if you have a substantial deposit.
In Spain there are interesting mortgage rates, and banks have special products designed for non-residents borrowers. Others adapt the existing types to the personal circumstances of the buyers. You should normally be requested to proof your income together with your monthly spending.
A lot Spanish property is bought off-plan, with a mortgage where you can put down a deposit on an incomplete home in a new development. Many of these provide common areas such as gardens, swimming pools, tennis courts and gyms, all for an annual fee.
Getting a mortgage in Spain
If you don’t have the cash, there are two ways to pay for your foreign home. You can extend your main mortgage or you can get a new mortgage for the property. Extending your mortgage is currently a cheap way of borrowing the extra cash you need. The other option is to take out a second mortgage on your holiday home.
Arranging a mortgage in Spain doesn’t necessarily mean dealing in a foreign currency. Abbey and Barclays, for example, offer buyers the opportunity to deal in euros or sterling. If you’re buying a property in Spain to let out, you’ll receive rent in euros so it makes sense to take the mortgage out in euros so you can offset the rent against repayments.
If you are not letting the house, but your main income is in euros, again it makes sense to take out a euro mortgage. But if you earn in sterling, a sterling mortgage is usually your best bet, otherwise you need to worry about the exchange rate. Whatever currency you opt for, the mortgage will be run in the same way
Choice of lenders for a mortgage in Spain
In Spain, you’ll have a choice of lenders - both native mortgage companies and a handful of UK lenders. Many Spanish banks, such as Solbank, are keen for mortgage business with foreign customers. They have branches along the coast with English-speaking personnel who will be willing to help you through the whole process.
Several UK lenders also have operations based in Spain. These include: Abbey, Barclays, Banco Halifax Hispania, Leeds & Holbeck BS, Newcastle BS, Norwich & Peterborough BS and Royal Bank of Scotland International. These are all effectively Spanish operations, but usually have English speakers who can offer advice in Spain.
Getting a mortgage and buying a property in Spain is proving more popular than ever, thanks to the urge to escape to the sun and the arrival of low-cost, no-frills airlines.
The two most popular Mortgages in Spain are:
Fixed rate mortgage: the interest rate is fixed at the start of the mortgage. The periodic amount for the payment of principal and interest will not change during the term of the mortgage.
Keep in mind that with this type of interest we are aware of the amounts we will be paying until the mortgage term is finished, however, we don't know whether the interest rate level will be reduced in the market or not.
Variable interest mortgage: The interest rate on your mortgage will be adjusted up or down according to current interest rate levels. The periodic amount for your principal and interest payment will go up or down with these rate changes depending on the index set chosen (such as MIBOR).
The initial interest will be initially lower. The banks normally use this tool to make the mortgage offer more attractive, later on this interest may convert into an excessively high interest
Now is a good time to buy in Spain as European interest rates are low and there is a wide selection of properties available, from apartments on developed plots, farmhouse (fincas) and village locations, through to villas and townhouses.
Mortgages must be formalized in a public deed of mortgage before a Public Notary . The property must be registered at the Property Registry with the name of the owners whom the mortgage is given to.
The mortgage shall also be registered at the Property Registry to evidence that it is a preferential charge in the property. A non-registered mortgage is an ordinary loan and therefore does not constitute a preferential charge on the property.
Although Spanish Law allows the re-mortgage of a property, however, the banks refuse to re-mortgage this because the guarantee corresponding to the first mortgage is preferential over the second one.
This is the normal way to finance a property in case one does not have the full amount of the purchasing price at the moment of the signature of the sales contract before a Spanish Notary.
The mortgage is a contract between lender and borrower to assure the borrower will repay the debt, otherwise he will lose the property pledged. On mortgaging a property, the loan is secured on the property.
Key Points For Mortgage Seekers:
You can choose a Spanish bank or a British bank to provide your mortgage.
Depending on who funds your mortgage, your mortgage can be in Euros or British Pounds. Some lenders, such as Abbey and Barclays, allow you to choose which currency your mortgage will be in.
Equity release from your existing home in the UK can be useful. You will then pay your mortgage in Pounds at a UK interest rate. Eurozone interest rates are considerably lower than British rates - a Euro mortgage will cost you less. (Interest rates in the Eurozone have historically tended to be lower than in the UK.) Most Spanish banks require that you contribute 20 to 30 percent of the cost/value of the property and they will provide a mortgage for 70 to 80 percent of the cost/value of the property.
If you intend to live in Spain and the house you are buying is to be your main residence, you will usually not need as big a deposit as a buyer who is buying a second home will. In the banks' eyes, people are more likely to default on an overseas second home than they are on their principle residence.
How Much Can I Borrow in Spain?
In the UK, mortgages are commonly based on a multiple of your income - for example mortgages to the value of three times your annual income are very common. A recent trend, as property prices have become increasingly unaffordable in many areas of the UK, is for banks to lend higher multiples - such as four or five times your gross annual income, provided you have a secure, relatively high, income
Most Spanish-based lenders do not provide mortgages based on an income multiple. Instead, they compare your repayments with your income. They work on the principle that your mortgage repayments should be no more than one-third of your income. A higher mortgage than this may be offered if you have excellent prospects of increasing your current income or if you have an excellent credit history or if you have a substantial deposit.
In Spain there are interesting mortgage rates, and banks have special products designed for non-residents borrowers. Others adapt the existing types to the personal circumstances of the buyers. You should normally be requested to proof your income together with your monthly spending.
A lot Spanish property is bought off-plan, with a mortgage where you can put down a deposit on an incomplete home in a new development. Many of these provide common areas such as gardens, swimming pools, tennis courts and gyms, all for an annual fee.
Getting a mortgage in Spain
If you don’t have the cash, there are two ways to pay for your foreign home. You can extend your main mortgage or you can get a new mortgage for the property. Extending your mortgage is currently a cheap way of borrowing the extra cash you need. The other option is to take out a second mortgage on your holiday home.
Arranging a mortgage in Spain doesn’t necessarily mean dealing in a foreign currency. Abbey and Barclays, for example, offer buyers the opportunity to deal in euros or sterling. If you’re buying a property in Spain to let out, you’ll receive rent in euros so it makes sense to take the mortgage out in euros so you can offset the rent against repayments.
If you are not letting the house, but your main income is in euros, again it makes sense to take out a euro mortgage. But if you earn in sterling, a sterling mortgage is usually your best bet, otherwise you need to worry about the exchange rate. Whatever currency you opt for, the mortgage will be run in the same way
Choice of lenders for a mortgage in Spain
In Spain, you’ll have a choice of lenders - both native mortgage companies and a handful of UK lenders. Many Spanish banks, such as Solbank, are keen for mortgage business with foreign customers. They have branches along the coast with English-speaking personnel who will be willing to help you through the whole process.
Several UK lenders also have operations based in Spain. These include: Abbey, Barclays, Banco Halifax Hispania, Leeds & Holbeck BS, Newcastle BS, Norwich & Peterborough BS and Royal Bank of Scotland International. These are all effectively Spanish operations, but usually have English speakers who can offer advice in Spain.