Portugal has fewer banks offering loans to non-residents, while Spain offers a broader range of loan products, including those for buying and renovating homes for non-residents. Continue reading to understand which place offers the best deal for the home you've always wanted.
Picture this: you're relaxing on your terrace, sipping a glass of Sangria, or maybe enjoying a Porto wine while looking out at the sea. This dream could become your reality, but what's the first step?
Deciding where to lay your hat—and your investment.
We've made a guide to help you understand mortgages in Spain and Portugal. We'll review interest rates, give you valuable tips, and discuss the pros and cons.
Let's figure out together which place offers the best deal for the home you've always wanted.
Obtaining a mortgage in Spain as a non-resident means up to 70% financing with a minimum 30% down payment and extra costs. The process is complex, with a 35% debt-to-income ratio limit and additional documentation.
Non-residents are eligible for 75-80% financing when accessing a mortgage in Portugal with foreign income. The offer includes up to 30-year terms with a debt-to-income cap of 35%.
To qualify for a mortgage in Spain or Portugal as a non-resident, you are required to fulfill a range of criteria to be considered eligible by the bank.
These include:
For both Spanish and Portuguese mortgages, you will need identification documents such as a passport, national identity document, Foreigner Identity Number (NIE in Spain or NIF in Portugal), credit reports, and your latest tax returns.
Expect slight variations in the required documents between banks in both countries, particularly for non-resident applications.
You can obtain mortgages with fixed-rate and variable-rate options, tailored to your specific situation, in Spain and Portugal.
However, in Portugal, the number of banks offering loans to non-residents is limited. In contrast, Spain offers a greater diversity of products, allowing non-residents to secure loans for buying and renovating houses.
To help you form an opinion about the offering of the best Spanish banks versus the best Portuguese banks for non-residents, let's make a brief comparison.
Lender | Suitable for | Pro | Con |
---|---|---|---|
Santander (Spain) | non-residents interested in properties under 100,000 EUR | offers loans from 100,000 to 1,000,000 EUR | higher pricing on mortgage offerings |
Sabadell (Spain) | non-residents seeking competitive offers | allows interest rate reduction by 0.75% with bonus products | requires a minimum 150,000 EUR property purchase |
Cajasur (Spain) | non-residents buying in Costa del Sol | loan range is 80,000 to 1,000,000 EUR | rental income is not counted towards income ratio |
UCI (Portugal) | self-employed buyers | the convenience of submitting documents in original languages | fewer product options |
Millennium BCP (Portugal) | non-residents earning outside the EU | mortgages ranging from 25,000 to 2,000,000 EUR | minimum property price is set at 100,000 EUR |
Banco PBI (Portugal) | Non-residents Portuguese and EU residents | loans up to 1,500,000 EUR | an opening fee of up to 1.0% may add to the overall cost of obtaining a mortgage |
If you’re more interested in learning about the best Spanish mortgages for non-residents or exploring the top Portuguese mortgages for non-residents, remember that you can compare mortgage offers without any fees.
Homevest is a solution that allows you to request and compare offers from leading banks in direct competition, ensuring you get the best mortgage deals. It’s an efficient way to see what loans you can access, whether in Spain or Portugal, directly from abroad.
The average interest rate in Spain for non-residents was 5.5% in October.
The lowest interest rate was a fixed rate offer of 3.64%, and the highest was a variable rate offer of 6.44%.
Bank | Interest rate (effective rate past three months) |
---|---|
CaixaBank | 4.66% |
Sabadell | 5.29% |
Cajasur | 5.81% |
Santander | 6.10% |
The effective interest rate reflects the annual cost of a loan, accounting for the loan's duration and any initial promotional interest rate periods.
Mortgage rates for non-residents in Portugal change depending on the bank and mortgage type. It's important to also think about extra fees from the bank.
A cost comparison made on June 1, 2023, can help understand these rates better.
Bank | Interest rate |
---|---|
UCI | 4.65% first 5 years. 1.64% + Euribor 6m after that |
Millennium BPI | 4.65% first five years. 1.75% + Euribor 6m after that |
Banco PBI | 1.80% + Euribor 6m |
The costs for buying a property in Spain and Portugal vary, especially depending on where the property is and whether it's a new build or a previously owned one.
Keep in mind that buyers usually have to pay most of these costs, which include:
Service | Price in Spain | Price in Portugal |
---|---|---|
Property tax | 8-12% of the purchase price | 1-8% of property value |
Notary and land registry fee | 800-900 EUR | 800-1000 EUR |
Legal fees | 1% | 1-3% |
Estate Agent Fee | 3-6% | 5% |
Homevest mortgage brokering | 0 | 0 |
To expedite the mortgage process from abroad, consider using a service like Homevest which can help you save time and money along your journey.
Homevest allows you to centralize your mortgage application and request offers from top lenders in Spain or Portugal. The advantage is that you can manage everything comfortably from home without incurring any fees.
Homevest specializes in matching you with lenders that best fit your financial situation, streamlining the process.
It's entirely your choice which mortgage you opt for your new home, as it depends on your specific needs.
A mortgage in Spain offers a variety of choices and additional benefits, making it a solid option for equity building and potential appreciation. Furthermore, non-EU citizens can qualify for the Golden Visa, as Spain encourages foreign investment.
However, be aware that fees and prices might be slightly higher compared to Portugal.
Alternatively, if you prefer a smaller country with ocean access, consider a mortgage in Portugal. Both countries offer the potential to generate rental income, being popular destinations for tourists worldwide.
Sources used and checked in November 2023:
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.
Portugal is a hot destination for international property buyers, who have settled there or are buying in a holiday home. If you're planning to buy a property in Portugal, it is essential to explore your mortgage options. Read on to discover the best Portuguese mortgages for non-residents and learn how to compare them quickly and without unnecessary cost.
While many Spanish banks do not impose restrictions based on property value or the nationality of buyers, it's essential to be aware that every application is evaluated on a case-by-case basis. Learn everything you need to know about getting a mortgage in Spain, including requirements, interest rates, and info for non-resident buyers.
Having decided that you want to buy a house or apartment in Portugal, you might find yourself wondering what the best way to proceed with finding and applying for a suitable mortgage might be. Rest assured, you have arrived at the right place - we're here to explain your options and help you find a mortgage based on your individual situation.
When comparing mortgages for a property in Spain, staying updated on the latest market deals can help you to negotiate effectively. Negotiation is standard practice, and this is where Homevest excels, helping you secure the most advantageous deal.
A platform for mortgages
Homevest is a pan-European mortgage and homebuying platform. We strive to bring the mortgages in the 21st century.