Can you negotiate your mortgage rates in Spain when applying from abroad?

In Spain, it's common practice to negotiate your mortgage rates when applying for financing. But is it possible if you are a non-resident applying from abroad?

We'll cover everything you need to know in this handy guide. We'll discuss essential tips and even seek expert advice to give you a clear picture.

Reasons for negotiating your mortgage rates in Spain

There are several reasons to negotiate your mortgage rates in Spain, including:

• cost savings over the life of the mortgage
• long-term benefits such as reduced monthly payments and financial stability
• a lower interest rate can help mitigate the risks associated with fluctuating exchange rates, especially if your income is not in euros

What should you know about negotiating mortgage rates in Spain?

In Spain’s competitive lending market, banks are open to negotiate to attract qualified borrowers. 

If you have a strong financial profile, including a high credit score, stable income, and a favorable debt-to-income ratio, you're in a better position to negotiate favorable mortgage rates.

"Understanding two key elements is crucial in negotiations: first, identifying what's negotiable in an offer, and second, recognizing the power it gives us. In a mortgage deal, various aspects are open for negotiation, such as the arrangement fee, interest rates, and bundled products. 

Effective negotiation involves addressing multiple aspects simultaneously. For instance, banks may promote third-party products, like insurance and accounts, allowing us to leverage this to secure lower interest rates as a condition.

We should also need to be aware of our bargaining strength, which can be influenced by several factors.

Keep in mind that the higher the acquisition price, the more incentive there is to close the deal”, says Samuel López, Mortgage Broker.

How do you negotiate mortgage rates as a non-resident applying for a Spanish mortgage?

Negotiating your mortgage rates in Spain can lead to significant savings over the loan's duration. To successfully negotiate and be satisfied with your mortgage, here’s what you need to have in mind:

1/ Understand your needs and financial situation 

Having a clear understanding of your financial needs and ensuring you meet the banks' criteria for a qualified borrower can make it easier to negotiate favorable terms.

2/ Get quotes from multiple lenders

Start by determining the type of mortgage you need, then request quotes from various lenders. 

Having a list of the best Spanish mortgages for non-residents will provide you with insights into the various options currently available in the market.

It may be a good opportunity to work closely with a mortgage broker. Usually, they have connections with multiple lenders and can facilitate introductions to suitable banks.

3/ Compare costs across lenders

Fees can vary between lenders. Carefully examine each offer, even those that seem similar initially. 

A key tool for comparison is the annual percentage rate (APR) of each loan estimate. The APR, which is usually higher than the interest rate, reflects the total cost of the loan, including fees, over its lifetime.

4/ Negotiate terms and conditions

Now that you have more options on your table, you can start narrowing your choices. If you prefer a particular bank, now is the time to negotiate the mortgage rates. 

Once you’ve reached an agreement, ensure all negotiated terms are clearly stated in the mortgage offer.

Mortgage brokers negotiate the best deals on your behalf

Using a mortgage broker can be a valuable alternative to negotiating rates on your own. 

Homevest connects you with experienced brokers who work with you to prepare your application and represent your interests effectively. Thanks to their network, you’ll receive multiple offers to compare and select the best option for your needs.

When you choose a dedicated mortgage broker through Homevest, your application is carefully reviewed, submitted to various lenders, and tailored mortgage offers are provided based on your unique situation.

This was the case for Stefan, where Homevest helped him save almost 3,000 EUR by negotiating a reduced commitment fee. Not to mention the competitive interest rate margin of 0.95%, which will contribute to long-term savings for the client. Continue reading to discover his story of investing in Spain from Germany.  

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.