Mortgage fees in Spain for foreigners: what you need to know

Securing a mortgage in Spain might appear simple, but there are a few added expenses that non-residents should understand upfront to avoid unexpected costs down the road. 

We’ll break down the most common fees foreigners face and how to budget effectively for them. 

What are the common mortgage fees in Spain for foreigners, and how much should you expect to pay?

Depending on the location, foreign buyers should expect to cover up to 10% in taxes and fees in addition to the down payment and property price.

Here’s a breakdown of the common costs:

Notary 

The notary oversees the official purchase process, records the property deed and ensures everything’s legal.

Typically, notary fees range from €600 to €1,000, depending on the property’s value.

Registration

Registering the property deed with the Land Registry is essential for the property to be officially yours. 

This fee is usually between €400 and €700, also depending on the property price.

Gestoria

Many buyers hire a gestor (administrative professional) to handle paperwork, especially if they don’t speak Spanish. 

Gestoria fees average around €300.

Appraisal

Spanish banks require a property appraisal before granting a mortgage. 

This valuation typically costs between €300 and €500, paid upfront by the buyer and is the responsibility of the applicant.

You have the option to use the bank’s appraisal service or choose an independent one. 

CaixaBank reimburses appraisal costs after the mortgage is signed, but you’ll still need to cover it initially.

What tax-related mortgage fees should you expect in Spain?

You should also be aware of taxes tied to the mortgage process. These vary by property type and region.

AJD (Stamp Duty)

This tax is applied to the mortgage deed formalization, with rates ranging from 0.5% to 1.5% of the mortgage liability, depending on the region.

Property Transfer Tax (ITP)

When buying a second-hand property, the ITP applies. 

Rates vary by region and typically range from 6% to 10% of the property value.

VAT (IVA)

For new properties, VAT is usually 10% of the property price for residential properties and 21% for commercial ones. 

This can add up significantly, so be sure to budget for this if buying a newly built home.

Example calculation:

For a €200,000 property in Madrid, a foreign buyer might expect around €22,781.97 in taxes and fees for a 30-year mortgage on a new home with a €40,000 deposit. 

Source: Bankinter calculator

Estimate your budget with Homevest to see how much you can afford

A good start to your home-buying journey in Spain is understanding how much you can secure from Spanish lenders.

A mortgage can expand your property budget, but first, you need to assess your affordability and how your debt capacity can determine the maximum loan you can secure.

Use Homevest Spain to receive an accurate budget estimation that will guide you in your next steps in the mortgage process.

Other Homevest services include connecting you with a broker to help compare multiple offers and secure the best terms. This is particularly beneficial if you have already found a property and want a financing consultant to guide you.

What additional mortgage fees apply to foreigners in Spain?

There are additional fees that are often overlooked but can add up quickly and vary based on specific bank requirements.

Opening fees (Comisión de Apertura)

Some banks apply a one-time opening fee, typically 0.5% to 1% of the loan amount. 

While some banks waive this fee, it’s generally standard, as banks are legally allowed to charge it. 

Early repayments

For fixed-rate mortgages, Spanish law caps early repayment fees at 2% for the first 10 years and 1.5% afterward. 

For variable-rate mortgages, early repayment fees may be reduced or waived altogether.

Currency exchange

If your income or savings are in a currency other than the euro, conversion fees can add up. 

Specialized currency exchange services can help avoid high bank charges.

What ongoing costs come with a Spanish mortgage? 

Beyond the initial purchase, owning property in Spain comes with ongoing expenses:

Home insurance

Home insurance is legally required for the entire duration of your mortgage, but after the first year, you are free to switch providers if you choose. Annual costs typically range from €200 to €300, depending on coverage and provider.

Life insurance

Life insurance is only required for the first 12 months of the mortgage.

Premiums vary widely but can start around €200 annually.

Property maintenance costs

Maintenance and utility costs vary by property size and location. 

Monthly expenses range from €50 to €150 for basic upkeep, with additional fees for communal areas if the property is part of a complex.

How can you minimize mortgage fees in Spain as a foreigner?

• Negotiate mortgage terms. While some fees are standard, it’s worth discussing terms with your bank, especially if you have a strong financial profile or are making a large down payment.
• Work with a mortgage broker. A mortgage broker can help you find the best deals and guide you through local laws, often negotiating better terms.
• Understand regional differences. Since taxes and fees vary by region, researching costs in different areas can reveal savings opportunities.

Some banks offer discounted rates if you open a bank account or use other banking products with them, like home insurance. Additionally, look for banks with promotional rates for foreign buyers, as these can help reduce upfront costs.

Sources used and checked in November 2024:

1. Property buying costs in Spain: taxes and fees in 2024
2. Mortgage expenses
3. Taxes associated with the purchase of a new home
4. Banco de Espana: expenses associated with the mortgage
5. How are mortgage expenses distributed?
6. UCI: mortgage fees 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.