Mortgage in Spain for UK citizens: everything you need to know

Thinking about owning a property in a sunny, warm destination? Spain could be the perfect place for your next home. With over 290,000 UK citizens already part of a thriving expat community, navigating the process of securing a mortgage in Spain for UK citizens has become an accessible process.

This guide will walk you through everything you need to know—from the best mortgage options for UK buyers to the application process and tax implications.

Let's begin.

How easy is it to access a mortgage in Spain for UK citizens?

Securing a mortgage in Spain for UK citizens remains straightforward, even after Brexit. There have been a few changes, but you can still buy property and get financing under conditions similar to before Brexit.

To qualify, you'll need to meet the bank's criteria and show solid financial stability to ensure your ability to repay the loan.

What should UK buyers know post-Brexit?

After Brexit, there are a few things to keep in mind if you're buying property in Spain:

• Stays in Spain are now limited to 90 days without a visa
• Renting out property in Spain may result in higher taxes, with non-EU residents (including UK citizens) subject to a 24% tax rate, compared to 19% for EU residents
• There's ongoing discussion about introducing a tax of up to 100% on real estate purchased by non-residents from outside the EU, including the UK. While details are still unclear, this measure is aimed at addressing housing affordability concerns in Spain

How do mortgages work in Spain?

The mortgage system in Spain operates differently from that in the UK. 

The key difference lies in how interest rates are determined: in Spain, rates are tied to the Euribor, which offers multiple maturities (e.g. 6 months, 12 months). In contrast, the UK uses a single base rate set by the Bank of England.

Non-residents in Spain typically have access to three types of mortgages:

Fixed-rate mortgages

They provide stability and protection from economic fluctuations. 

In Spain, they can cover the entire loan term, unlike in the UK, where fixed rates are typically offered for shorter periods.

However, the overall terms for fixed-rate mortgages in Spain are generally shorter, often around 20 years, compared to 30 years for variable-rate mortgages. 

Some Spanish banks only offer this option to euro earners, limiting choices for UK citizens.

Variable-rate mortgages

The interest rate adjusts every 6 or 12 months, depending on the bank. 

While the initial rate is lower than fixed-rate mortgages, monthly payments can fluctuate, making budgeting more difficult.

Mixed-rate mortgages

Begin with a fixed rate for a set period, then switch to a variable rate. 

After the fixed period, the rate is based on the Euribor plus a margin specified in the contract.

For non-residents, banks typically offer 60-70% Loan-to-Value (LTV), requiring a larger deposit (30-40% of the property value).

What are the current mortgage rates in Spain for non-residents?

Mortgage rates in Spain for non-residents currently range between 2.55% and 4.5%, depending on factors such as the repayment term, bonus products, and individual circumstances. 

For 2025, CaixaBank projects that the Eurozone interest rate equilibrium will stabilize between 2% and 2.25%.

To better understand how interest rates vary, consider this: for loans under €100,000, the interest rate is typically higher due to the smaller loan amount.

Use Homevest to get a personalized estimation based on the financial products available to non-residents in Spain. 

It's quick, reliable, and provides the maximum loan amount available, along with an interest rate tailored to your current debt-to-income ratio.

Which Spanish banks offer mortgages for UK citizens?

UK citizens earning income in GBP have access to a variety of mortgage options from Spanish banks such as Sabadell, Santander, CaixaBank, Cajasur, Bankinter, and UCI. 

Here's an overview of the key highlights offered by these top Spanish banks for UK buyers:

What deposit do you need for a mortgage in Spain from the UK?

You'll generally need to make a down payment of around 30% to 40%, plus cover taxes and fees.

Most Spanish banks offer financing up to 70% for non-residents, but this depends on the individual's financial profile. 

Before moving forward with your mortgage process, check how much you can afford. 

How do you apply for a Spanish mortgage from the UK?

1. Start by obtaining your NIE number, required for property and mortgage transactions in Spain
2. Gather and organize your documents for the application
3. Obtain pre-approval to see how much the bank might be willing to lend you. This is a preliminary check, so it doesn't guarantee the loan
4. Have the property appraised as part of the mortgage process
5. Receive the FEIN (European Standardized Information Sheet) and then the formal mortgage offer from the bank
6. Finalize the process by signing the mortgage agreement
7. Collect the keys to your new property in Spain

Using a mortgage broker can help you secure better deals while saving time and effort. 

Brokers compare multiple offers and handle all the necessary paperwork for you. 

A handy solution is Homevest which connects you with mortgage brokers in Spain to guide you through the process and help you compare offers from top banks.

NIE application requirements 

The NIE is a Foreign Identification Number you can obtain from the Spanish consulate in London.

To apply, prepare the required documents, pay the application fee, and expect to receive your NIE within a few weeks.

Spanish banks use your NIE to register your details in their systems, which is necessary for moving forward with a binding pre-approval. Non-formal offers can still be processed without it.

Documents required 

When applying for a mortgage in Spain, UK citizens need to prepare specific documents for the bank's initial evaluation. 

Here's what you'll need:

Tax forms and credit report

• The P60 form is mandatory, as it provides details about your income and taxes for the last financial year. This form is issued annually in April after the financial year ends.
• For your credit report, you can access it through Experian

Employment and financial proof

• National ID or passport
• Proof of employment, such as a work contract
• Recent payslips to confirm your income (usually from the last 6 months, although some banks may only require 3 months)
• Bank statements to demonstrate your financial health (usually for the last 6 months)
• Evidence of deposit, showing you have the necessary funds for the required down payment

Banks typically prefer applicants with stable employment, so it's best to apply while you're in a secure job.

"A great candidate for a mortgage typically has a stable and consistent income, and low debt in their country of origin. One of the common mistakes when applying for a mortgage is not checking your credit rating in your own country first. Your credit rating is important for mortgage eligibility and is based on your credit history", explains Natalia Dominguez, the International Buyer's Manager at UCI.

Spanish bank account

You'll also need a Spanish bank account when buying a house in Spain. 

Having a local account makes everything smoother and gives you better options.

What is the mortgage reflection period in Spain?

The mortgage reflection period in Spain is typically 10 days, allowing borrowers to review the terms of their mortgage before finalizing the agreement.  

In Catalonia, this period is extended to 14 days due to regional regulations. 

During this time, borrowers can reconsider the offer, seek advice, or withdraw from the agreement without penalties.

What are the tax implications of buying property in Spain?

When buying property in Spain, it's important to account for an additional 6.5%–12.4% on top of the property price. 

This covers costs such as property taxes, notary fees, registration, and appraisal fees. The exact amount depends on the region, property type, and service provider.

Taxes for resale properties

For resale properties, the main tax is the Property Transfer Tax (ITP), which varies by region and can range from 6% to 10% of the property's price. 

Property Transfer Tax for second-hand properties in the Canary Islands is set at 6.5%. 

If you're unsure whether investing in a holiday home is worthwhile, comparing prices and exploring top holiday spots can help you make a decision.

Taxes for new properties

When purchasing new properties, buyers are responsible for Value Added Tax (IVA), typically at 10% of the purchase price, and Stamp Duty (AJD), which varies by region but is usually between 0.5% and 2%.

What other taxes should you consider?

• Notary costs, which range from 0.2% to 0.5% of the property's price
• Gestoría and bank fees that cover administrative tasks and bank-related costs
• Land registry fees, ranging from 0.4%
• Property appraisal which range from €300 to €600, depending on the property.
• Opening fee which may be negotiable, depending on the bank

For an overall picture, read a guide about the taxes you need to pay when buying a property to avoid surprises along the way.

Frequently asked questions

Can I live in Spain permanently if I buy a property?

Buying property does not automatically grant you the right to live in Spain permanently especially if you are a UK citizen. 

Read on for more information and see what you need to do to qualify for residency in Spain by buying property. 

Can you retire in Spain from the UK after Brexit?

Yes, it is possible to retire in Spain even though the UK is no longer part of the EU. 

You'll need to address several important considerations, including securing health insurance, before making this move. It's worth mentioning you have the option to transfer your pension from the UK to Spain. 

How can British second homeowners spend more than 90 days in Spain after Brexit?

If you can prove you have enough money to live in Spain without working, you might qualify for a non-lucrative visa. This visa allows you to stay without working and can be extended.

What's the best option: applying for a mortgage overseas from the UK or directly with a Spanish bank?

Obtaining a mortgage from a UK bank for purchasing property in Spain can be challenging, as options are limited and deposit requirements are often higher.

Applying for a mortgage with a Spanish bank is generally a better choice, offering a wider range of options tailored specifically to non-residents.

Can I get a mortgage in Spain if I already have one in the UK?

Yes, getting a mortgage in Spain is possible even if you already have one in the UK.

However, your debt should remain under 30-35% of your income.

Can I remortgage a property in Spain as a non-resident?

Yes, non-residents can remortgage to secure better interest rates or access additional funds, though stricter bank requirements may apply.

Fewer banks offer remortgage options to non-residents due to the perceived higher risk.

Sources used and checked in January 2025:

1. UK residents in Spain
2. Spain proposes 100% tax on homes bought by non-EU residents
3. The Spanish real estate market in 2024-2025
4. Consulate of Spain in London
5. Buying property in Spain from the UK
6. Bankinter mortgage in Spain for non-residents
7. Sabadell mortgage for non-residents
8. Cajasur mortgage for non-residents
9. Santander mortgage for non-residents
10. HolaBank mortgage for non-residents
11. UCI 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.