If you want to buy a holiday home in Spain, but don’t have all the funds and need a mortgage, it can be tricky to organise between countries.
Banks in your home country may be unwilling to lend you money to buy a property abroad and it may be difficult to organise one in a country where you don’t live or speak the language.
The good news is, however, that it is possible to contract a mortgage with a Spanish bank, even if you’re a non-resident, although the conditions will be slightly different from those for locals or residents.
What is a non-resident mortgage?
The first point to remember when contracting a non-resident mortgage in Spain is that the conditions will be slightly worse than the mortgages offered to residents. This is because you are seen as a greater risk if you live abroad and the banks cannot as easily get the money from you if you don’t pay up. There are certain conditions that apply to non-resident mortgages. These include:
- Financing: Most banks will lend non-resident up to 70 percent of the sale or appraisal value of the house or apartment you are going to buy, although some lower that percentage to 60 percent. Those who live in Spain, on the other hand, can get up to 80 percent.
- Maximum term: In general banks will offer you a 20-year plan, although some financial institutions may offer you a term of up to 30 years.
- Higher interest: The interest on these types of mortgages is usually higher, around 3 or 4 percent, while residents are usually offered less than 2 or 3 percent interest. Some banks will offer to lower your interest if you contract other products such as insurance or bank cards, although these will cost you more money.
- Starting fee: Some banks will charge you a mortgage starting fee, the cost of which is usually 0.5 percent of the amount of the loan. Spanish or resident foreigners, on the other hand, are not usually charged this fee.
In most cases, your mortgage will be granted in euros. However, if the bank approves and grants you the loan, Spanish mortgage law allows you to transfer the mortgage to the currency in which you earn your income. This thankfully means you will be able to pay the instalments in the currency of your country without having to convert it to euros, incurring extra fees.
Which banks in Spain offer mortgages for non-residents?
There are many different banks in Spain that offer mortgages for non-residents. These include online finance companies such as Hipotecas.com or more traditional banks such as Banco Santander, CaixaBank or Bankinter, among others. You should contact as many banks as you can to compare their offers and see which one will have better conditions.
Can any non-resident get a mortgage in Spain?
Unfortunately not, it will of course depend on your individual circumstances. However, banks will be more likely to finance you or not, depending on where you live.
For example, Spanish banks will be unlikely to grant mortgages to people who live in countries with economic problems, with a volatile currency or with ongoing wars, or countries that are tax havens, due to the risk that this entails.
This means those who live in certain African or Latin American countries may find it difficult to get a mortgage, as well as those from Russia, North Korea or Iran. It may also be tricky for people from tax havens such as the British or US Virgin Islands, Bermuda and the Cayman Islands.
What documents do I need to apply for a non-resident mortgage?
There are several different documents you’ll need if you want to take out a mortgage in Spain. These include:
A copy of your identity documentation. This also includes:
- Your NIE (Foreign Identification Number), which you need to apply for if you’re doing any financial transactions within Spain.
- The tax residence certificate of the country in which you currently live. You have to ask the tax agency in your country.
- A copy of your employment contract and your latest pay slips. Banks usually ask for the last three payslips, but you might need to provide more.
- Your income statement of the last year. Bank statements of the last six months, in which your income, your expenses and the collection of any debt appears.
- Information about your current assets. For example, if you own other homes, you will have to present the certificate of ownership issued by the Property Registry of the corresponding country.
- Your credit report reflecting your debt repayments. You may have to ask the central bank of your country of residence for this.
Keep in mind, all documents written in another language other than Spanish will have to be translated by a sworn translator, which you will have to pay for.
How do I go about getting a non-resident mortgage in Spain?
The process of contracting a non-resident mortgage is actually very similar to if you are resident.
You will have to make an appointment with several Spanish banks present all your documentation.
Once it’s been processed, you wait for the offers and decide which one you want. It's important to note that you will have to sign the mortgage before a notary, in person.
What should I look out for when I'm offered a mortgage?
There are certain points you should be aware of when you're offered a non-resident mortgage in Spain. These include:
- Making sure the bank offers services in your own language
- Ensuring your mortgage conditions are not linked to any other services, such as insurance
- Looking for the most competitive interest possible
- Making sure you're not charged extra for early repayment of your mortgage
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