How to get a mortgage in Spain from abroad

Getting a mortgage in Spain from abroad can be time-consuming if you do not know who can help you and which banks accept non-resident applicants. But do not worry, Homevest can help you with understanding eligibility criteria, mortgage terms and the application process.

Nicholas Vinberg
Written by Nicholas Vinberg
Published at 2022-10-28T14:58:24Z
Last updated at 2023-08-14T13:17:13Z
Readtime 5 minutes
Because of the booming holiday home demand on Costa Brava, Costa Dorada, Costa del Azahar, Costa Cálida, Costa del Sol and the Balearic Islands, there are several banks in Spain that lend to applicants from abroad. This is good news for expats too, since Spanish banks tend to be flexible about foreign income as a result.

Some accept foreign currency earners, while some restrict their lending to applicants from abroad that earn income in euro. A few banks even accept customers from the US, South-America, Australia, New Zealand and select Asian countries. 

The mortgage terms and requirements might differ based on where you live, what currency you earn income in, the purpose of the property and your current home-ownership status and will always be priced on a case-by-case basis. 

There are however some general guidelines that can give you an understanding of what kind of a mortgage you could expect.



Mortgage terms in Spain with foreign income

  1. The repayment length of Spanish mortgages range between 5 to 30 years. 
  2. The economic effort ratio requirement states that your monthly mortgage repayments cannot exceed 40% of your free cash flow (monthly income – monthly loan expenses). This requirement slightly differs between lenders and based on your individual situation, and ranges between 30-40% with some potential exceptions allowing a higher indebtedness. 
  3. There are limited options for financing properties in rural areas. As a rule, the process and likelihood of getting a mortgage increases the closer the property is to an urban area or larger city. 
  4. Most Spanish lenders have a minimum requirement of only underwriting mortgages for property purchases above 100,000 € for applicants buying from abroad.


As low as 20% deposit for Spaniards living abroad

In addition to the property price, the amount of savings you will need to purchase a property will mainly depend on your country of residence and currency you receive income in. 

With some lenders, Spanish expats that live abroad might be eligible to get an up to 80% Loan-to-Value mortgage, meaning that only a 20% deposit is required. 

Other non-residents living in countries with stable currencies, such as all countries in the Eurozone, the United Kingdom, Canada, Croatia, Denmark, Czech Republic, Hungary, Norway, Sweden, Switzerland, Romania, Poland and Bulgaria need a minimum deposit of 30% saved. 

Applicants living in countries such as the US, Australia, Japan, New Zealand, Singapore and Brasil need to contribute with a 40-50% deposit and face a more limited selection of mortgage options.

As a general guideline, you will always need a deposit of at least 40% saved if you are buying a second home, holiday home or investing in a property in Spain, independent of your nationality or country of residence.


Three options when selecting type of interest rate

Spanish banks usually offer the following interest rates:

  • Variable interest rate mortgages are in most cases revised twice a year and tied to the Euribor. The spread that is attributed on-top of the fluctuating percent currently ranges between 1-2%.
  • Fixed interest mortgages are, as the name suggests, tied to a fixed percent rate throughout the whole length of repayment. Fixed mortgage rates currently range between 4-6%.
  • Mixed interest rate mortgages blend the fixed rate and variable rate options. In practice this means that you pay a fixed rate the first 3, 5 or 10 years, followed by it automatically converting into variable rate until paid off. 

If you have read this far and decided to go ahead with fulfilling your dreams of owning a property in Spain, you might have questions about your specific mortgage options. 
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