Mortgage in Spain

Buying a house in Spain is a dream come true for many. But buying a home abroad often involves a mortgage loan. How does that actually work in Spain? And what conditions must a mortgage application meet? In this blog we take a closer look at these questions.

First of all, it is important to know that the maximum mortgage loan you can get from a Spanish bank is determined by various factors. One of the most important factors is the value of the property. In Spain it is common that you can borrow a maximum of 70-80% of the appraisal value of the property. This means that, for example, for a home with an appraisal value of € 200,000, you can borrow a maximum of € 160,000.

In addition, the bank also looks at your financial situation and your age. For example, they assess whether you are able to repay the mortgage and determine the term of the mortgage. It is therefore wise to have all relevant financial information ready when applying for a mortgage. Consider, for example, a recent salary slip, tax return and any debts.

When applying for a mortgage in Spain, the “hipoteca responsable” also applies. This means that the monthly mortgage payments may not exceed 35% of the monthly net income. This means that if, for example, you have a net monthly income of €2,000, the monthly mortgage payments may not exceed €700. This percentage can vary per bank and per individual situation, but in general this standard is applied to ensure that mortgage payments do not become too heavy and that the loan can be repaid responsibly.

Finally, the interest is also important when calculating the maximum mortgage loan. The higher the interest rate, the lower the maximum mortgage loan will be because the monthly costs will be higher. It is therefore wise to compare different banks and mortgage providers before making a final choice.

In short, when applying for a mortgage in Spain, there are several conditions that you must meet. It is therefore wise to be well informed and to compare different options before applying for a mortgage. This way you can be sure that you are taking out a responsible and suitable mortgage loan and that you can enjoy your Spanish dream home to the fullest!