Mortgages

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How to use your home to purchase another property – fiscal residents only -

For Spanish fiscal residents, paying their income taxes in Spain, it may now be possible to finance 100% of the purchase of a second Spanish property against both their current Spanish property and the new property – known as a Doble Garantía Hipotecaria.

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Interest rates for foreigners in Spain

For a standard non-resident profile, typical mortgage interest rates for 25 years at Euribor + 1.5% for a variable rate mortgage.

As at the end of October 2022, the 12 month Euribor (the rate which most European banks use as their mortgage benchmark) is 2.661% and although this is significantly higher than the negative rate we have been used to since 2016, rates are still low and borrowing remains cheap. In the US for example, the 12 month USD LIBOR is currently 5.06% and mortgage rates are generally higher. With the US dollar strengthening further against the Euro, it’s not surprising we are seeing an influx of American buyers.

This currently results in a variable interest rate of around 4% which would typically be revised every 12 months on the policy anniversary. Fixed rates are still available but some banks are moving away from full term fixed rates and offering a mixed rate such as five years fixed followed by the variable rate. Having said this, it may still be possible to achieve long term fixed rates, examples: 3.75% fixed 10-year deal on a €150,000 loan from one of the main lending banks, and 3.8% for 25 years. Even if life cover is not selected, these rates only rise to 4.85% and 4.9% respectively which are still very reasonable.

Bank opening fees range from 0 to 1% and whilst most banks insist the client takes out ancillary products such as home and life insurance, this isn’t always the case.

Interest rates are lower for fiscal residents and high value mortgages. Additional products aren’t usually required.

Of course, depending on the profile of the client and the banks conditions, actual rates can be lower or higher. Rates have been fairly constant since 2019 but could still be set to increase significantly as Euribor and inflation increases. Our advice: buy now and secure an exceptionally low rate while you can!

Maximum LTV

Up to 70 % for non-residents
Up to 80 % for residents

Note: Mortgage rates can vary the above information is given as a guide only.

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Useful Links/Downloads

Buyer's Guide to Mortgages in Spain

Market News - July 2022

No obligation mortgage quote

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*Information is subject to change