Fact Sheet & FAQ: Spanish Mortgages for Non-Residents

Fact Sheet Overview
Key Facts (Eligibility, Types, Process, Features)
Key Numbers (LTV, Rates, Deposit, DTI, etc.)
Key Costs & Taxes (Purchase & Annual)
Tax Differences: New-Build vs. Existing Properties in Spain
Equity Release in Spain
Key Considerations (Docs, Insurance, Risks, Structures)
Example Scenario
Next Steps
FAQ Overview

Main guide: Spanish mortgage guide (full article) | LTV limits and affordability for a Spanish mortgage in Spain | Costs and taxes in Spain (mortgage + purchase) | Spanish mortgage interest rates in Spain (fixed vs variable)

FAQs: Eligibility for a Spanish mortgage, Maximum LTV in Spain, Typical interest rates in Spain, Interest-only mortgages in Spain, Required documentation, Time to get a mortgage in Spain, Life insurance for a Spanish mortgage, Buying via a company or trust, Taxes in Spain, Currency risk (EUR vs GBP/USD), Renting out the property in Spain, Tax benefits, Capital gains tax in Spain, Reselling, Moving to Spain, Legal changes, Using home-country financing, Revaluation / refinancing.

Fact Sheet: Spanish Mortgages for Non-Residents

Key Facts:

Eligibility:

Non-residents are eligible, but typically receive stricter terms than residents.
Typical down payment: 30%–40%.

Mortgage Types:

Fixed-rate: Rate set for the full loan term.
Variable-rate: Linked to Euribor + margin.
Mixed/semi-fixed: Fixed initially, then variable.
Interest-only: Rare in Spain and usually limited to niche/private-bank cases.

Mortgage Process Timeline:

Initial assessment and pre-approval (1–2 weeks).
Property selection & reservation agreement.
Mortgage application & valuation / underwriting (4–6 weeks).
Mandatory 10-day cooling-off period (after formal offer documents are issued).
Final signing at notary and funds release (~6–8 weeks total in many cases).

Mortgage Features:

Non-resident terms typically 20–25 years.
Residents can often go longer (30–40 years), subject to age policy.

Key Numbers:

Aspect	Typical Figures
Loan-to-Value (LTV)	Non-residents: 60%–70%; Residents: ~80%
Interest Rates	Fixed: ~3%–4%; Variable: Euribor + ~1%–1.5% (margin varies)
Deposit (Cash)	Non-residents typically 30%–40%
Debt-to-Income Ratio	~30%–35% of net monthly income
Minimum Loan Amount	Often around €100,000 (varies by bank and region)
Mortgage Term	Non-residents: typically max 25 years; Residents: 30–40 years (age dependent)
Notary & Registration Fees (Purchase)	~0.5%–1% of purchase price (purchase deed)

Key Costs & Taxes (Beyond Mortgage):

Purchase Taxes:

Existing (resale) properties: Property Transfer Tax (ITP): 6%–10% depending on region.
New-build / off-plan: VAT (IVA): 10% + Stamp Duty (AJD): ~1%–1.5% depending on region.

Annual Property Taxes:

IBI (municipal tax): charged annually, calculated off cadastral value (rates vary by municipality).

Wealth Tax:

Often discussed from around €700,000 net assets (per person), with regional differences; outstanding mortgage debt can reduce the net taxable base.

Rental Income Tax:

Non-residents: often cited as 19% (EU/EEA) or 24% (non-EU) depending on circumstances.
Mortgage interest deductibility is typically more favourable for EU/EEA taxpayers than for non-EU taxpayers.

Capital Gains Tax (CGT):

Non-residents: commonly cited flat 19% on gains.
3% withholding on the sale price for non-resident sellers (reconciled via filing).

Read more on costs and taxes in Spain: Spanish mortgage costs, notary and taxes in Spain (full breakdown)

Tax Differences: New-Build vs. Existing Properties in Spain

Existing (Resale) Properties:

ITP: 6%–10% depending on region.
No VAT payable.

New-Build or Off-Plan Properties:

IVA: 10% of purchase price (residential).
AJD: additional ~1%–1.5% depending on region.

Equity Release in Spain

General Overview:

Equity release is more limited than in some other countries and often purpose-led (e.g., improvements, consolidation, investment rationale).
Terms depend heavily on borrower profile, income currency, and the bank’s appetite.

Private Banking Options:

Some private banks may allow equity release, often capped around ~60% LTV in Spain.
Expect full documentation and a clear explanation of how funds will be used.

Refinance / Registration Considerations:

New mortgage deeds and registry steps apply when refinancing or raising funds; exact cost allocation can vary.

Key Considerations:

Documentation Required:

Passport, NIE (foreign ID number), proof of income, bank statements (last 6–12 months), employment contract, tax returns.

Life Insurance:

Not legally mandatory, but commonly required or strongly encouraged by banks, and often linked to better Spanish mortgage pricing in Spain.

Foreign Currency Risks:

Loans are typically in EUR; borrowers earning in non-EUR currencies are exposed to FX movements.

Ownership Structures:

Spanish limited companies (S.L.) can buy property, but mortgages can be harder to secure and often come with stricter terms.
Trusts are not typically straightforward vehicles in Spain for holding real estate.

Resale Considerations:

No restrictions on resale timing.
Early repayment penalties can apply, particularly for fixed-rate loans (subject to statutory limits and contract terms).
CGT and local taxes (e.g., Plusvalía Municipal) may apply on sale.

Example Scenario (Illustrative):

Property purchase: Marbella apartment, €500,000
Mortgage: 70% (€350,000), 20-year fixed rate, 3.5%
Monthly payment: ~€2,030 (capital + interest)
Deposit & costs: €150,000 deposit + ~€50,000 taxes & fees (illustrative; varies by region and property type)
Wealth tax: net value may be reduced by outstanding mortgage (rules and thresholds vary)

Next Steps:

Speak to a specialist broker experienced with non-resident mortgages in Spain.
Prepare documentation early (especially tax returns, proof of funds, and translated documents if needed).
Consider FX planning (buffer, staged conversions, or hedging) if income is outside the Eurozone.
Budget for taxes/fees and insurance, not just the deposit and monthly payment.

FAQ: Mortgages in Spain

Eligibility for a Mortgage

Who can get a Spanish mortgage? Both residents and non-residents can apply for mortgages in Spain. Spanish citizens, EU nationals, and non-EU foreigners may be eligible, provided they meet the bank’s lending criteria. Key requirements include stable income, good credit history, and a reasonable debt-to-income ratio (often ~30–35% of net income). Foreign buyers generally need a NIE (Número de Identificación de Extranjero), which is required for the property purchase and typically expected during the mortgage process.

Foreign buyer conditions: Non-residents (those spending less than 183 days/year in Spain) usually face more conservative terms, including a 30–40% deposit and shorter loan durations (often capped around 20–25 years). Banks may request proof of foreign income, international credit reports, and sometimes additional guarantees. Euro-denominated income can help; non-euro income can reduce maximum LTV due to currency risk.

Guide link: Eligibility for a Spanish mortgage in Spain (full section)

Maximum Loan-to-Value (LTV)

How much can you borrow? Spanish banks lend against the lower of the purchase price or appraised value.

Residents: often up to ~80% LTV for primary homes.
Non-residents: typically 60%–70% LTV, depending on profile, income currency, and property type.

Example: A non-resident buying at €500,000 might borrow up to €350,000 (70% LTV) and provide €150,000 as deposit, plus purchase costs.

Guide link: LTV limits in Spain and Spanish mortgage term rules

Typical Interest Rates

What rates should you expect? Indicatively, rates in 2024–2025 are often discussed in the ~3%–4% range for many mainstream cases, with variable rates frequently quoted as Euribor + ~1%–1.5% (margin varies by bank and conditions).

Fixed: payment stability for the full term.
Variable: adjusts (often annually) based on Euribor.
Mixed: fixed initially, then variable.

Guide link: Spanish mortgage interest rates in Spain (fixed vs variable)

Interest-Only Mortgages

Are interest-only loans available? Interest-only mortgages are rare in Spain. Where they exist, they’re usually limited to niche/private-bank scenarios or short periods, and generally require strong overall wealth and a clear repayment strategy.

Often limited in duration (if offered).
More likely for high-net-worth borrowers or special cases.
Expect stricter LTV and documentation requirements.

Required Documentation

What paperwork do you need? A typical Spanish mortgage file includes:

ID: Passport and NIE.
Income proof: employment contract, 3–6 payslips, and 1–2 years of tax returns.
Bank statements: commonly 6–12 months.
Credit history: foreign credit report / bank references (especially for non-residents).
Property docs: reservation / purchase agreement and details needed for valuation.
Existing debts: statements for loans/mortgages and material credit obligations.

Guide link: Spanish mortgage documentation requirements in Spain (full checklist)

Time to Get a Mortgage

How long does it take? A Spanish mortgage often completes in 4–8 weeks from application to signing/drawdown, depending on responsiveness, valuation timing, and bank workload.

Pre-approval: often 1–2 weeks (if documents are complete).
Valuation + underwriting: commonly 2–3 weeks.
Cooling-off period: 10 days minimum by law after the formal offer documents are issued.

Guide link: Spanish mortgage process timeline in Spain (step-by-step)

Life Insurance

Is life insurance required? Life insurance is not legally mandatory, but many lenders strongly encourage it, and it is often used to qualify for better pricing on a Spanish mortgage in Spain. Home/building insurance is typically required to protect the collateral.

You can often use an external insurer if coverage is equivalent (bank acceptance required).
Check whether cancelling bank-linked insurance changes your rate later.

Guide links: Insurance requirements in Spain (home + life) | Life insurance clauses and bundling in Spain (legal section)

Buying Through a Company or Trust

Can I use a company or trust? It’s possible, but often adds complexity. Spain is not generally trust-friendly for property holding in the way common-law jurisdictions are. Company structures (including Spanish S.L.s) may be used, but banks often lend more conservatively to corporate borrowers (lower LTV / higher pricing), and there are administrative costs to maintaining the structure.

Taxes

What taxes apply when buying a home in Spain?

ITP (resale): typically 6%–10% depending on region.
IVA + AJD (new-build): typically 10% IVA + ~1%–1.5% AJD (region dependent).
Notary & registry (purchase deed): often cited at ~0.5%–1% combined.
Annual IBI: municipal tax based on cadastral value.

Guide link: Purchase taxes and fees in Spain (with mortgage cost breakdown)

Currency Fluctuations

How does FX risk affect me? If your income is not in EUR, exchange-rate movements can materially change the real cost of repayments over time. A stronger EUR makes your payments more expensive in your home currency.

Consider a buffer in EUR for payment stability.
Some buyers use staged conversions or hedging tools (e.g., forward contracts).

Guide link: Currency considerations for mortgages in Spain

Renting Out the Property

Can I rent my mortgaged property in Spain? Usually yes. Mortgages typically do not prohibit renting, but you must comply with local rental regulations (especially for short-term/tourist lets) and ensure your insurance matches the use of the property.

Tax note: Rental income is taxable in Spain, and treatment can differ depending on residency and EU/EEA status.

Guide link: Renting rules and considerations in Spain (legal section)

Tax Benefits of a Mortgage

Are there tax deductions for having a mortgage? For most buyers, Spain does not provide a broad mortgage-interest deduction for primary residences purchased after 2013. Indirect benefits may include deductibility against rental income in certain cases, and reducing net taxable wealth where relevant rules apply.

Capital Gains Tax

Will I owe tax when I sell? If you sell at a profit, capital gains tax may apply. Non-residents are commonly cited as paying a flat 19% on gains, with a 3% withholding mechanism on the sale price (then reconciled via filing). Residents are typically taxed on a progressive scale on savings gains.

Restrictions on Reselling

Can I resell soon after buying? Spain imposes no general restrictions on resale timing. Practical considerations include early mortgage repayment fees (contract + statutory caps), transaction costs, and taxes on any gain.

Moving to the Country

Does owning a Spanish property help with residency? Property ownership alone does not automatically confer residency rights in Spain. However, property ownership can support certain visa routes by demonstrating accommodation and financial capacity.

Investor residency (“Golden Visa”): historically linked to a €500,000 minimum unencumbered (unmortgaged) property investment (check eligibility rules at the time of application).

Guide link: Golden Visa and residency-by-investment considerations in Spain

Changes to Laws

Have there been recent legal changes? Spain’s 2019 mortgage law introduced stronger consumer protections, including a mandatory notary transparency step, a reflection period, and changes to fee allocation and certain limits (e.g., early repayment caps), improving transparency for borrowers.

Guide link: 2019 Spanish mortgage law in Spain (key borrower protections)

Using Financing from a Home Country Bank

Can I use a foreign bank to finance a Spanish property? In practice, most buyers who want a mortgage use a Spanish lender because the security is registered locally. Alternatives can include raising funds against assets in your home country and buying as a cash buyer in Spain.

Guide link: Using home-country financing vs a Spanish mortgage in Spain (FAQ)

Revaluation of the Property

Does the bank revalue later? Generally no. Spanish mortgages do not automatically change based on market value shifts. If values rise, you may explore refinancing or equity release, subject to bank policy and LTV limits in Spain.

Guide link: Revaluation and equity release in Spain (FAQ)

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Spanish Mortgage Factsheet and FAQ