How to secure a mortgage in Spain as a non-resident in 5 steps

Looking to buy a property in Spain while living abroad? The process may sound complex, but it's simpler than you might think with tools like Homevest at your disposal.

In this guide, we'll break down the process of securing a Spanish mortgage as a non-resident into five steps, highlighting how Homevest can transform your property-buying journey. Let's dive in!

How easy is it to get a mortgage in Spain in 2023 with income from abroad?

Non-residents can qualify for a mortgage in Spain. However, the ease of obtaining a mortgage depends on your financial situation and the specific rules of the bank you are applying with.

One advantage of obtaining a mortgage in Spain is that interest rates are generally lower than in many other European countries. 

To secure a mortgage in Spain, non-residents need to demonstrate their financial stability and provide the necessary documentation. Much of the process will depend on the policies and requirements of the specific bank you are dealing with.

How to get a mortgage in Spain as a non-resident in 5 steps

Getting a mortgage can be challenging, but with careful planning and research, you can secure the financing you need to turn your dream of owning a home in Spain into a reality.

By following these five key steps in a systematic manner, you can navigate the process with confidence:

1. Calculate your budget
2. Explore banks offering Spanish mortgages for non-residents
3. Obtain pre-approvals and compare bank offers
4. Find the right property
5. Complete your property purchase and pay the monthly loan

#1. Calculate your budget: key factors to consider

When calculating your budget for a mortgage in Spain, it's essential to consider several key factors. Here are some important points to take into account:

1. Income: Evaluate your income sources, including salaries, investments, or rental income. Calculate your monthly net income to determine the amount you can comfortably allocate towards mortgage payments.
2. Expenses: Consider your monthly expenses, including utilities, insurance, transportation, and other necessary costs. Subtract these expenses from your income to assess available funds for mortgage payments.
3. Debt-to-Income ratio: Calculate your debt-to-income ratio by dividing your total monthly debt payments by your gross income. Lenders prefer a lower ratio, so aim to keep it below 40% for better approval chances.
4. Down Payment: Determine the amount you can contribute as a down payment, typically at least 30% of the property's value. Consider available savings or other funding sources.
5. Additional costs: Remember to account for additional costs associated with purchasing a property, such as property taxes, notary fees, registration fees, and potential maintenance or renovation expenses. These costs can vary based on the property's location and size.
6. Interest rates and loan terms: Research interest rates and loan terms offered by various lenders. Take into consideration whether you prefer a fixed or variable interest rate, as this can affect your monthly payments and long-term financial planning.

Taking these factors into account when preparing your budget can provide a more accurate understanding of your financial capacity, enabling informed decisions as you explore mortgage loan options in Spain.

Homevest generates an estimated loan budget based on your financial information. Consider this budget as your guiding compass while navigating the diverse range of banking products available.

#2. Explore banks offering Spanish mortgages for non-residents

Sabadell, Cajasur, Unicaja, Bankinter, BBVA, Santander, Cajamar, Caixa, and Hipotecas.com are among the banks from Spain that offer mortgages for non-residents.

What is the credit offer for a mortgage in Spain?

One lender worth considering is Sabadell, which offers an attractive interest rate of 1.65% + Euribor 6m.

Cajasur is another suitable option, particularly for those interested in purchasing property in the Costa del Sol and Andalusia regions. They offer variable rates starting at 2% + Euribor 12m, with loan amounts ranging from 80.000 to 1.000.000 EUR.

Santander's Mundo Mortgage for non-residents provides flexibility with fixed and variable rate options, with terms of up to 20 years.  

Continue reading a comparative analysis of the best Spanish mortgage available for non-residents and learn more about the available options.

#3. Obtain pre-approval and compare bank offers

Obtaining preapproval and offers is an important step after identifying suitable banks for your mortgage in Spain. 

Keep in mind to evaluate the offers based on your budget, financial goals, and personal preferences. Consider factors such as interest rate stability, flexibility, and overall affordability. Choose the offer that best suits your needs and aligns with your long-term financial plans.

What are the eligibility requirements for a mortgage in Spain for non-residents?

The eligibility criteria for a mortgage in Spain can vary among lenders, particularly for non-residents. Several crucial factors are often taken into account, including:

• Income stability and employment consistency
• Credit score and history
• Residency status
• Debt-to-Income ratio
• Down payment capacity
• Property type and value

Lenders look for reliable income sources and steady employment as indicators of your ability to repay the mortgage. To determine creditworthiness, they also assess your credit score, even from your home country, if you're a non-resident. 

Homevest assists you in comparing the credit options available for your situation

Whether you live and work in the UK, Germany, or Switzerland, you can request credit offers from banks in Spain through Homevest to compare and choose the final product.

As a digital platform, Homevest simplifies the process of obtaining a mortgage loan with income from abroad. It helps you streamline the document collection process by centralizing them and sending them to banks in one go.

The documents undergo an internal verification process. If they meet the eligibility requirements, they are simultaneously forwarded to the banks without the need for re-uploading when requesting additional offers.

Homevest prioritizes the security of your data and uses the provided documents solely for verification purposes and determining your eligibility for a mortgage loan. 
 

#4. Find the right property

Once you have obtained preapproval and reviewed the offers, it's time to begin your search for the right property if you haven't found one yet. 

Finding properties that align with your budget and meet your specific requirements can be time-consuming. However, utilizing popular property websites such as Idealista.com, Fotocasa.es, ThinkSPAIN, and Savills can greatly assist you in your search.

Take the time to analyze the market, gather relevant information, and be ready to negotiate terms, prices, and conditions with the sellers or their representatives.

To give you an idea of property prices, here’s the average price per square meter in 7 popular cities in Spain:

A long list of fees and property taxes can quickly add up. Read on to learn more about the taxes you need to pay when buying a property in Spain as a non-resident.

#5. Complete the property purchase and pay the monthly loan

Once you have agreed on the price, purchase the property and commence paying your monthly mortgage loan. The duration of the loan can range from 5 to 30 years, depending on the borrowed amount.

It's essential to bear in mind that the mortgage process in Spain may not align with procedures in your home country. Hence, carrying out comprehensive research and seeking advice from experienced professionals is paramount to effectively navigate the process.

Conclusion

When it comes to accessing the right mortgage for your needs, utilizing a service like Homevest can simplify the process and increase your chances of success. Homevest streamlines the mortgage application process, centralizes documents, and helps you compare offers from various lenders. 

To see a real-life example of how Homevest has assisted individuals in securing the right mortgage, check out our case study featuring Ferran, a Spanish citizen living in Finland who inherited part of a house in Castellón, on the Costa del Azahar, and wanted a mortgage to finance purchasing the rest of the property.

Frequently asked questions

What is the minimum income required for a non-resident mortgage?

A minimum net monthly income of 1500 EUR is often required by lenders for non-resident mortgage applications in Spain.

What is the maximum age to qualify for a non-resident mortgage?

The Spanish legislation does not set a maximum age for taking out a mortgage. However, most banks impose an age limit based on the borrower's age at the end of the loan term. Typically, this limit is around 70 to 75 years old.

How long does it take to get a mortgage in Spain for non-residents?

Once you have identified the property you wish to purchase, the approval process for non-resident Spanish mortgages typically takes around four to six weeks. 

Sources used and checked on June 2023:

1. Property prices in Barcelona
2. Property prices in Madrid
3. Property prices in Malaga
4. Property prices in Valencia
5. Property prices in Palma de Mallorca
6. Property prices in Tenerife
7. Property prices in Alicante

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.