HSBC vs. Sabadell mortgages: which is better for a property in Spain?

If you want to access a mortgage to buy a property abroad, it is not necessary to turn to a UK bank like HSBC. Instead, you can access a mortgage directly from a bank in Spain if you want to purchase a property there. 

Sabadell is one of the top banks in Spain that offers mortgages to citizens from the UK.

Keep reading to discover a comparison between a mortgage from HSBC and one from Sabadell before deciding which option is more financially advantageous.

HSBC vs. Sabadell mortgage for non-residents: an overview

HSBC is one of the largest banks in the UK and one of the few that offer international mortgages for buying properties abroad. You can access such financing only for certain countries, and, of course, you must meet a series of criteria imposed by the bank to be considered eligible.

On the other hand, Sabadell is one of the most competitive Spanish banks that offer mortgages to UK citizens. They provide flexible mortgages, starting at 70,000 EUR, provided you can demonstrate a stable source of income to repay the loan.

Eligibility conditions

Getting an HSBC mortgage seems to be quicker. To qualify, you need to be over 18, live in the UK, and be an HSBC customer. You also have to keep a minimum balance in your accounts and meet an age limit by the end of the loan.

Sabadell, being a Spanish bank, has distinct requirements. Instead of relying on credit scores, the bank evaluates credit reports to analyze existing loans and calculate key performance indicators such as debt-to-income ratio and economic effort ratio.

Getting a Sabadell mortgage, especially as a non-resident, is more complex. You must have a permanent job for at least 6 months, put down a minimum deposit of 30%, keep your debt low compared to your income, borrow a maximum of 70% of the property's value, and have a clean credit history.

Required documents

For both HSBC and Sabadell mortgages, you will need identification documents such as a national identity document or passport, bank statements indicating your salary deposits, and employment verification.

Additional documents may be required depending on your specific situation. For instance, Sabadell requests income statements from the past two years, credit reports, and the last two tax returns.

An essential document when accessing a mortgage is the NIE, which stands for Número de Identificación de Extranjero or Foreigner Identification Number.

Keep in mind that even if you don’t access a Spanish mortgage, you’ll need this document when buying a property there. 

HSBC mortgage for property in Spain: pros and cons

Pros

• quicker application process as you are a resident applying for a mortgage loan
• the mortgage would be in the same currency as your income, so you won't lose money due to conversion rates
• no translations issues 
• your credit score might increase your chances of getting a mortgage

Cons

• limited to certain countries
• higher interest rates (6,39% compared to an effective rate of 4,48% at Sabadell)
• a larger deposit 

Sabadell mortgage for property in Spain: pros and cons

Pros

• available for non-residents and foreigners, including GBP earners
• the process is straightforward, with no translations required for your English documents 
• competitive interest rates specifically for non-residents
• flexible repayment terms that can be tailored to the borrower's financial situation

Cons

• potential for higher interest rates compared to resident mortgages

HSBC vs Sabadell mortgage: which is better for a UK citizen interested in buying a property in Spain?

When choosing a lender for your mortgage, consider your financial situation and what's most comfortable for you.

HSBC may offer a quicker process for UK residents, but it comes with limitations and potentially higher costs. Sabadell, on the other hand, offers more flexibility and accessibility for non-residents, making it a strong choice for those looking to invest in Spanish real estate.

When comparing mortgage offers in a foreign country, having support along the way is highly valuable. Homevest is a solution that helps you access the most competitive offers in Spain without fees. 

The digital service Homevest allows you to upload and consolidate all the necessary mortgage documents easily. These documents undergo a verification process, and if they meet the required criteria, they are shared with Sabadell and other eligible banks.

Homevest matches applicants with banks that suit their needs, enabling them to receive multiple offers. This aims to simplify the often complex process of obtaining a mortgage in a foreign country by consolidating resources and providing options in one location.

If you're interested in obtaining more information about securing a mortgage in Spain from the UK, explore everything you need to know, including requirements and post-Brexit changes.

Sources used and checked in October 2023:

1. Buying property abroad with HSBC
2. Sabadell mortgage for non-residents

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.