Self-build mortgage in Spain. Options for foreigners

There has been a substantial increase in the number of mortgages taken out by foreigners in Spain, with 30% of foreign buyers opting for a mortgage instead of buying with cash.

So buying and building your own home in Spain can be a dream come true. Thankfully, self-build mortgages make it possible for you to create your ideal property, even if you a non-resident. 

Let’s break down what you need to know to get started.

Can foreigners get a self-build mortgage in Spain?

Yes, foreigners can get a self-build mortgage in Spain. 

But it depends on the bank and your situation.

Many banks in Spain offer self-build mortgages, but they have strict rules, especially for non-residents. Still, many Spanish banks, including BBVA, Banco Santander, and Bankinter provide this kind of loan.

If you're not a resident, you might have to deal with higher interest rates or need to provide more money than residents. Usually, you also need to show you have good finances and own land that is ready for building.

What are the eligibility criteria for a self-build mortgage in Spain for foreigners?

Foreign applicants must meet several eligibility conditions to secure a self-build mortgage in Spain:

Own urban land: You need to own land classified as urban and have it registered in the Land Registry. This must be the land you plan to build on.

Have funds: You must have personal savings to cover at least 30-40% of the total investment. However, this percentage varies based on the type of property you're building.

Property registration: Have the land registered in the Property Registry.

Development classification: The land must be classified for development.

Building license: Obtain a permit to build from the local council where your house will be constructed.

Architectural plan: Design a plan that needs to be validated by the College of Architects.

Energy certificate: Get an energy performance certificate.

Construction estimate: Have a construction estimate from the company responsible for the work.

How does a self-build mortgage work in Spain?

A self-build mortgage works differently from regular mortgages. 

Instead of getting all the money at once, the bank gives you the money in parts as the construction moves forward. 

Banks will release the funds in stages, linked to the completion of specific parts of your construction:

Land purchase or development stage: You may receive up to 50% of the value of the land.

Certification stages: As construction progresses, you will receive further disbursements. These payments are subject to certification by an architect.

Completion stage: You get the remaining funds, usually around 10-20%, once the construction is complete and you get the completion certificate.

How much can you borrow for a self-build mortgage?

Typically, banks in Spain offer to finance up to 60-70% of the land and construction costs for your primary residence. 

The total amount you can borrow depends on how much your project is worth and how much money you can put in yourself, so just like with a regular mortgage.

For example, BBVA needs you to cover at least 30-40% of the total cost, while Banco Santander can finance up to 100% of the construction budget, but only up to 70% of the value of the finished home.

Apply for a mortgage with Homevest Spain

Homevest can help non-residents apply for a mortgage in Spain directly from abroad.

Homevest connects you with local mortgage brokers who will guide you through the mortgage process and assist in building your application. Once it's ready, they will submit it to eligible banks, allowing you to receive multiple offers.

They support you throughout the process and help you decide what’s best for your situation.

All services are free of charge, as the brokers receive a commission from the bank only if the mortgage is successfully completed.

How can you improve your chances of getting a self-build mortgage in Spain, directly from abroad?

If you are applying from abroad, here are some tips to improve your chances of getting a self-build mortgage in Spain:

• Work with an adviser. Using advisers who understand the process can help significantly as they can liaise with banks on your behalf and ensure all documents are in order.
• Strengthen your financial profile. Showing a steady income and a good credit score can make the bank feel more confident that you will pay back the loan.
• Own land and have approvals ready. If you already own land and have the building plans approved before talking to banks, it shows you are prepared and serious. This can make you a better candidate for the mortgage.

Sources checked and used in November 2024:

1. 2023 was the year foreigners fell for housing in Spain
2. Bankinter Self-Build Mortgage
3. Bankinter Creditchalet Mortgage
4. Santander Self-build mortgage to build your own home
5. BBVA Autopromotor Mortgage
6. Autopromotores: Requirements for building in Spain
7. Banco de Espana: Build your own house and finance it
8. Types of mortgages in Spain

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.