Mortgage loan in Spain

For many people, buying a property is the biggest financial commitment they can ever make. If you are buying abroad, some of the processes are likely to be similar to those you experienced in Poland, but there are many others with which you are not as familiar. We always and without exception recommend that buyers take sound, independent financial advice when considering buying a property in Spain.

Each client's personal circumstances and requirements are completely individual, so there is absolutely no substitute for consulting our completely independent and fully qualified financial partners for their objective, expert advice on mortgages, foreign exchange, insurance and more.

Conditions for buying property on credit

A great convenience for Polish clients is the possibility of obtaining credit from Spanish banks, which offer favorable terms. Relevant information related to this:

• The loan can be obtained up to 60-70% of the property value (depending on the customer's financial situation)
• The interest rate is about 4.4% - 4.7% per annum depending on the bank's decision and current promotions
• The loan can be spread over a period of up to 20 years, up to a maximum of 75 years.

In order to obtain a loan for the purchase of real estate in Spain, you need to meet the relevant conditions. Documents necessary from Polish citizens working in Poland or carrying out activities are:

• N.I.E. number. 
• photocopy of passport
• certificate from the bank on account ownership - bank opinion 
• bank statement for the last 6 months
• a list of earned income for the last 2 years - (e.g. PIT,CIT annual);
• entry in CEIDG or KRS
• A current certificate of earnings (if working), and an employment contract 
• extract from BiK

For Polish citizens doing work or business in GB, Ireland:

• N.I.E. number;
• Statement of account for the last 3 months;
• Payslips of the last 3 withdrawals;
• Tax Return or P60;
• Credit Report - Equifax or Experian (GB) or ICB (Ireland).

Mortgage loan in Spain

As mortgage terms have become horrendous in Poland, we have been receiving a lot of inquiries lately regarding mortgages in Spain. 

Spanish banks have many credit opportunities for foreigners and are quite willing to grant them loans - subject to certain conditions, of course.

Banks primarily check the current status of the borrower's financial condition and any liabilities in Poland or other European Union countries. 

You will need to show your BIK report, a statement of recent account transactions and PITs for a minimum of the last two years to do a very basic simulation of your creditworthiness.

You will also need documentation of the property you want to acquire.

How much initial contribution do I need?

To be on the safe side, we advise you to have an initial amount of about 50% of the price of the property you want to purchase (40% of your own contribution + 10% of additional fees: taxes, notary, registry, loan servicing, legal services). For Poles, Spanish banks currently do not give loans higher than 70%( with very good indicators of financial situation).

What is the maximum loan term for Poles?

The maximum loan term is 20 years, rarely 25 (with generally much worse terms).

How much is the monthly loan installment?

The monthly installment of the loan depends on the amount of the loan and is most often shown in simulations as fixed only for the first year of the loan. After that it depends on the euribor and other factors. In any case, the fluctuations are not as great as in Poland recently.

What additional fees will I have to pay if I take out a mortgage?

You will have to pay a loan origination fee, often also life insurance, credit insurance, etc. Often you will also have to pay for certified translations of relevant documents.

Mortgage loan in Spain step by step

It is impossible to do a general simulation of creditworthiness, because it is done for a specific property. So we sign a reservation contract, legally verify the property (we recommend extreme caution and using qualified lawyers), sign a contrato de arras( preliminary contract), pay a deposit and have a few dozen days (depends on the provision in the reservation contract) to find a loan.

During this time, the bank analyzes our creditworthiness, collects documents about the property and does its own appraisal, after which it presents us with a binding loan agreement. If it suits us - we sign and the transaction is completed.

That's why it's so important to take advantage of expert credit and tax assistance.

If you need more information regarding mortgages in Spain or legal services for buy-sell or tax advice - please contact us.