Mortgage in Spain for Non-Residents: Your 2024 Guide

Getting a mortgage in Spain as a non-resident is a big decision, so it's important to plan ahead. Before you start looking for properties, let's figure out your financing options: how much you can afford and what banks are available. This will help you with your property search.

Whether you're buying to relocate or invest, we'll help you with everything you need to know to make an informed decision.

If you've already found a property, Homevest can connect you with local mortgage brokers who'll guide you through the process, help you pick the best option, and support you every step of the way—without any commissions.

How does a mortgage work in Spain?

A mortgage in Spain (or hipoteca in Spanish) is usually tied to Euribor, a key interest rate in Europe.

Spanish banks typically use the 12-month Euribor, so rates can change quite a bit. The repayment period can range from 3 to 25 years, depending on your age and the bank.

Most banks accept applicants from the EU, US, and UK, but each application is looked at individually.

Is accessing a Spanish mortgage for non-residents the same as for residents?

Being a non-resident can make things a bit trickier, but you still can get a mortgage in Spain, even if you're self-employed.

"Your credit score is key for getting a mortgage and depends on your past credit activities. It's a good idea to check this in your home country" says Marta Fernandez Cobo, the Director of Online Mortgages at UCI.

As a foreigner, you can get up to 70% of the property's sale price or appraised value, although this is not a fixed rule and depends on your circumstances.

To qualify, you'll need to:

• Make a 30% down payment, plus an additional 6.5% - 12% for taxes
• Keep your debt-to-income (DTI) ratio usually capped at 30%, though some lenders may go up to 40%
• Provide extra paperwork to help reduce bank risk

On the other hand, if you're a Spanish citizen living abroad, you'll have better chances of getting higher LTV and better interest rates. The same goes for expats already living in Spain.

Is getting a 100% mortgage in Spain as a foreigner possible?

It's rare for a foreigner to get a 100% mortgage in Spain, but it might be possible if the bank owns the property.

Santander might also offer 100% financing to private banking customers if they use their investments as collateral for the extra 30%.

What type of mortgage can a non-resident access in Spain?

As a non-resident, you can get a mortgage to buy either a first home or a second property. This is the most common option, but it's not the only one.

Here's a quick rundown of other mortgage options in Spain:

Remortgage

If you already have a mortgage, you can refinance it through a remortgage.

The rules depend on a few things, but the biggest one is the value of your property. If you want to release some equity, the bank will examine your loan-to-value (LTV) ratio.

Self-build mortgage

To get a self-build mortgage, you'll usually need to show you have good finances and own land that's ready for building.

Banks typically cover 60-70% of the land and construction costs for primary residences.

Renovation mortgage

Buying a second-hand property? Some banks, like UCI, offer mortgages for property renovations.

This option covers the property purchase and up to 30% of the renovation costs, with funds released as the work progresses.

Non-resident mortgage for retirees

If you're 60+ and planning to retire in Spain, you can still apply for a non-resident mortgage, provided you have a pension.

You need to be no older than 75 when you finish paying off the loan, though some banks allow up to 80. This means mortgages are usually shorter, typically lasting 10 to 15 years.

While some banks accept different currencies like SEK, GBP, USD, DKK, and NOK, the mortgage itself will be in euros.

"Having income in a stable currency like the EUR, USD, SEK, or NOK opens up a wider range of mortgage choices. A more volatile currency can limit your options" says Maria Isabel Morillo, Deputy Branch Manager at Cajasur.

What steps should you take to get a mortgage in Spain?

Before gathering your mortgage documents, it's a good idea to start with a budget estimation so you know what you can afford. This will help you figure out how much you can get from Spanish banks based on your payment capacity.

Homevest's budget estimation tool is quick and easy to use. Just share a few details, like your residency, income, expenses, and liabilities.

You'll get a personalized estimate showing your affordability range, with details on how much you can borrow based on your debt capacity and interest rate.

1. Prepare your documents

Once you know what you can afford, you can start getting your documents ready to apply for a mortgage in Spain.

Requirements may vary by bank, but generally, you'll need:

• valid passport
• NIE
• proof of income (employment contracts, recent pay slips, and tax forms)
• recent bank statements
• credit report from your home country
• proof of the main residence
• proof of deposit (statements showing savings and investments)

Most banks accept documents in English, so you won't need to translate them.

2. Get mortgage pre-offers

To get a non-binding offer, you'll need to submit your documents.

Whether you do this yourself or with a broker, once your file is submitted, the bank will send a non-binding offer within 4 to 12 days.

These offers are valid for 30 days, but the rates may change with fluctuations in Euribor.

3. Decide on the property you want to buy

Do your research and consider getting help from a local real estate agent to find the right property in your preferred location.

You'll also need to provide the nota simple document to the bank, as the property type and location can impact your loan amount.

4. Negotiate your offer

Once you've confirmed the property details, you can negotiate with the seller.

When deciding on your offer, consider the property's condition, the market, and other important factors.

5. Accept the binding offer

Take a look at the details, terms, and conditions. If everything looks good, sign the deed in front of a notary.

How long does it take to get a Spanish mortgage?

The mortgage process usually takes about two months.

Here's how the process breaks down:

• Pre-approval
• Property valuation 
• Full application
• Risk approval 
• Completion

In Spain, you can choose your own certified appraisal company or use the bank's service (but it might take longer and cost more) to evaluate your property.

Keep in mind that once you sign the FEIN (the document outlining mortgage conditions) from the bank, it becomes a binding agreement, and you enter a mandatory reflection period. 

This 10-14 day period allows you to reconsider your commitment. You can review the terms or withdraw without penalty.

Which Spanish banks offer mortgages to non-residents?

CaixaBank, Sabadell, and Cajasur are some of the most competitive banks in Spain, but their interest rates can still vary.

Luckily, there are other banks offering financing options for non-residents looking to buy property in Spain.

Let's check out some Spanish banks offering mortgages to non-residents and how they compare for you:

What are the current mortgage interest rates in Spain?

In Spain, mortgage rates range from 2.55% to 4.5%, depending on the bank and any extra services you choose.

The final terms will also depend on the property type, value, and how much you're putting down.

Right now, variable-rate mortgages in Spain start at an average of 3.02%.

They're attractive because they often start lower than fixed-rate mortgages.

On the other hand, fixed rates give you more security but could end up being more expensive if variable rates drop over time.

Fixed-rate mortgages in Spain are currently around 3.51%.

Another option is a mixed-rate mortgage, which combines both. It gives you stability at the start and flexibility later, which can be helpful if your financial needs change.

Why might you not qualify for a mortgage in Spain when applying from abroad?

There are several factors that affect your eligibility, including your DTI ratio, income currency, employment status, and deposit.

Debt capacity (DTI Ratio)

Non-residents usually qualify with a DTI ratio capped at 30%, but some lenders may go up to 40%. This means your total monthly debt payments (including the mortgage) should not exceed 40% of your monthly net income.

Currency

Spanish banks are often hesitant to offer mortgages to foreigners whose income is in a currency outside of the euro, especially if the currency is considered volatile.

Currencies like GBP, USD, NOK, and SEK are usually fine. But if the currency is unstable, lenders see it as a higher risk because fluctuations could affect your ability to make repayments.

If your income is in a non-euro currency, you might still be able to get a mortgage through a Sociedad Patrimonial (a holding company), with banks like UCI or Sabadell, which can help in some cases.

Employment Status

You need to be a permanent employee, self-employed, or a pensioner. Temporary jobs aren't accepted.

If you're employed, you need to have been with your current employer for at least 3 months. If you're self-employed, you need at least 3 years of work history.

Also, you need an annual net income of at least €48,000 to meet the bank's criteria.

Deposit

The bank will require you to contribute at least 30% of the property's purchase price as your down payment. You'll also need to cover additional costs, which will add more to the overall property price.

How can you improve your chances of getting approved?

If a larger down payment isn't an option, try reducing existing debts or applying with a co-applicant.

Applying together is often better with most banks in Spain, as they tend to consider the shared finances in marriages, which can help your application.

What are the mortgage fees when applying for financing in Spain?

On top of the property price, you'll need an extra 6-11% for property taxes, notary, registration, and appraisal fees. 

These costs can vary depending on the region, property type, and service provider.

Here's a breakdown of the common costs:

Frequently asked questions

1. Can I get a mortgage in Spain from the UK?

Yes, UK citizens can still get mortgages to buy properties in Spain, despite the UK's exit from the EU.

Learn all about applying for a mortgage in Spain from the UK, including key requirements and post-Brexit changes.

2. Can I get a mortgage in Spain from the US?

Yes, US citizens can get a Spanish mortgage by proving they are eligible and financially reliable.

3. Can I get a mortgage in Spain as a Canadian citizen?

Non-EU citizens with stable incomes and low credit risk can apply for a Spanish mortgage.

Continue reading to learn the key requirements when applying for a mortgage in Spain as a Canadian citizen.

4. Is life insurance required when applying for a mortgage in Spain?

It's not required, but many banks offer discounts on rates if you buy extra products, like home insurance, from them.

5. What's the age limit for obtaining a mortgage in Spain as a non-resident?

Non-residents must usually be under 75 years old at the end of the mortgage term, though some banks may allow up to 80 years.

6. Which income currencies are accepted when getting a Spanish mortgage?

Most options are available if your income is in EUR, followed by a substantial selection for GBP, CHF, SEK, DKK, NOK, USD, or CAD earners.

If you earn in PLN, CZK, BGN, HUF, HRK, SGD, ILS, AED, QAR, SAR, MXN, JPY, NZD, or AUD, your choices are limited, with only one or two banks available. However, larger mortgages might give you more options.

7. How much do I need to travel to Spain to complete the mortgage process?

To complete the mortgage process in Spain, you must travel there at least once.

During your visit, you'll need to open a bank account, complete the bank's verification process, and sign the mortgage contract at the notary.

If you prefer a simplified process, you can hire a lawyer to handle everything on your behalf.

Sources used in this article:

1. NIE (Foreigner Identity Number)
2. Fixed, variable, and mixed rates in Spain
3. UCI renovation mortgage
4. Buying property in Spain from the UK
5. Retiring to Spain from the UK after Brexit
6. Taxes and fees when buying property in Spain

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.