HSBC overseas mortgage: is it the best choice for property in Spain?

When you're looking to secure a mortgage to buy a property in Spain, you're likely wondering about your options. Is it more advantageous to take out a loan from a UK bank, or might it be better to obtain one directly from a Spanish bank? 

Learn more about HSBC's mortgages, one of the largest banks in the UK, and see if they offer loans for purchasing properties abroad.

Continue reading to explore the available alternatives and determine what's best suited for your profile.

Does HSBC offer overseas mortgages to buy a property abroad?

Customers looking at overseas property investments can consider HSBC, as it is one of the few UK banks that offer international mortgages for purchasing properties abroad, including in Spain. 

What do you need to know about HSBC overseas mortgages?

You typically need to be over 18 and a resident of the UK to access an international mortgage loan with HSBC.

If you meet the eligibility requirements, you can attain HSBC Premier status, granting you access to a relationship manager to streamline the process.

Eligibility

Besides being over 18 and residing in the UK, you should be either a new or existing customer of HSBC. Some criteria include maintaining a specific minimum balance in your accounts and adhering to an age limit by the end of the loan term.

Requirements

Expect to provide an ID, any repayment records from your current bank, the payment plan for any existing mortgage, address proof for every borrower, bank statements indicating your salary deposits, and employment verification. 

Keep in mind that there might be extra documents needed based on your situation.

What can you expect from an HSBC mortgage to buy a property abroad?

Here's a quick overview of what HSBC brings to the table for potential overseas property buyers:

• Loan currency: GBP
• Down payment: you might be required to provide a more substantial deposit than usual to counterbalance the lender's perceived risk, which in turn would decrease the amount you'd need to borrow
• Initial interest rate: 6,39%
• Max LTV: 75% 

5 alternatives to HSBC overseas mortgage for a property in Spain

If you want to buy a property in Spain directly from the UK, HSBC might not be your best option. Fortunately, there are several options in the Spanish market to consider.

Remember that when you're looking for a bank for a mortgage, it's essential to carefully analyze the loan offers available to choose what's most suitable for your financial situation.

Caixa mortgage

Caixa Hola Bank mortgages cater loan amounts ranging from 100,000 to 2,900,000 EUR, with a loan-to-value (LTV) ratio of 70%.

If your income is in GBP, you have the flexibility to select:

1. a fixed-rate mortgage in GBP
2. either a variable or fixed rate in euros that's convertible to GBP. With this option, the monthly payment is in euros, but you can opt for a conversion to GBP throughout the mortgage's term

With a dedicated English helpline available, you can apply for a mortgage without translating your documents, ensuring a smoother and more efficient process.

Find out how to obtain a mortgage with CaixaBank, including steps and insights to guide your decision-making.

Santander mortgage

Mundo Mortgage's scheme caters to a diverse UK audience, offering a loan amount flexibility between 100,000 to 1,000,000 EUR. 

While Santander particularly values customers who have identified their desired property, requiring a nota simple as an essential document for the credit file, there's a silver lining: properties valued below 100,000 EUR are still eligible for application.

If you want to learn more about Santander's mortgage loan, see what requirements you need to meet and make sure you have completed Form 8211 (Santander's standard mortgage application form, capturing applicant and property details). It's the first step to prepare your file if you want to proceed with this bank.

Sabadell mortgage

The mortgage terms are flexible, offering 3 to 25 years and initiating loan amounts from 70,000 EUR.

Sabadell further enhances the mortgage experience by waiving administration or property registration fees. Additionally, UK customers can benefit from discounts on their mortgage repayments by channeling their salary into a Sabadell account and subscribing to the bank's insurance policies.

Explore Sabadell’s mortgage solutions and find the perfect fit for your financial journey. If you're interested in finding out more about the benefits of a mortgage from HSBC versus Sabadell, continue reading for a comparative analysis.

Cajasur mortgage

For UK citizens eyeing a property in Costa del Sol or Andalusia, Cajasur Bank emerges as a preferred choice, boasting competitive mortgage rates tailored for non-residents.

They extend financing up to 70% for non-resident Brits. 

It's noteworthy for potential UK buyers to consider that properties should command a price point of at least 120,000 EUR to qualify for a Cajasur mortgage.

Bankinter mortgage

If you want banking that's easy to manage from afar, Bankinter could be a good fit. They offer flexible payment options, but their rates might not always be the best, especially for long mortgages. Their loans can last up to 25 years. 

A heads-up: Bankinter works best for UK buyers earning at least 2,500 EUR a month who want a variable mortgage. 

Compare mortgage offers in Spain directly from the UK

Even if it may seem overwhelming to apply for a Spanish mortgage from abroad, some solutions can simplify this process and guide you at every step you need to take. Homevest is such a solution. 

You can upload documents to Homevest and manage your application without contacting multiple banks. Homevest, as a digital service, provides a self-service platform enabling you to request mortgage offers from top banks in Spain catering to non-residents.

With one application, you can compare mortgage options to find your perfect match.

Homevest simplifies the often complex process of obtaining a mortgage in a foreign country by consolidating resources and providing options in one location.

What are the current mortgage rates in Spain?

The latest Homevest roundup provides an insight into offerings from prominent banks over the past three months. 

Whether looking at varying interest rates or diverse loan amounts, from CaixaBank's 0.3% + Euribor rate to Santander's 5.82% effective rate, there's a spectrum of options to suit various financial needs.

The cost comparison includes offers from June, July, and August

Spanish banks offer variable, mixed, and fixed-rate mortgages. Homevest calculates the effective interest rate over the mortgage term to make them comparable. This allows for a comparison between variable-rate and fixed-rate mortgages. Additionally, Homevest considers promotional offers that reduce the interest rate for the initial years.

The effective interest rate is similar to the APRC but does not account for taxes and fees associated with the mortgage. Often, the most affordable offers come with conditions, such as the requirement to purchase home insurance from the bank. 

Continue reading a guide to have in place all the essential information about obtaining a mortgage in Spain from the UK, including the best Spanish mortgages available for UK buyers, the application process, and tax implications. 

Choosing the right mortgage for your property purchase in Spain is a significant decision. While HSBC offers overseas mortgages for UK residents, it's essential to explore all your options carefully. When making your choice, take into account various factors, including eligibility, requirements, interest rates, and loan terms. 

Sources used and checked in October 2023:

1. Buying property abroad with HSBC
2. Overseas mortgages from the UK

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.