Buying property in Spain has long been popular amongst foreign buyers – both investors and those seeking a second home in a sunny location. As interest grows, more and more clients are choosing to finance their purchase with a Spanish mortgage. In this guide, we explain step-by-step the mortgage process in Spain, the requirements that must be met, and how our agency supports clients every step of the way – even before they arrive in Spain.

Do foreign buyers use mortgages to purchase property in Spain?

Yes, and increasingly so. It's estimated that over half of buyers in popular regions like the Costa Blanca, Costa del Sol, and the Canary Islands choose bank financing. Spanish banks are happy to grant mortgages to non-residents and consider them reliable clients, provided they meet certain requirements.

For many foreign buyers, a mortgage is a way to:

• increase your purchasing budget,
• maintain financial liquidity,
• diversify investments,
• avoiding unfavorable currency conversions.

How do mortgages work for non-residents in Spain?

The Spanish mortgage system is similar to that in other European countries, but it does have some specific rules. Banks primarily rely on documentation from the client's country of residence. However, they can and often do consider the client's overall financial situation (e.g., assets in Spain or other countries), although the basis for assessing creditworthiness is actually the situation in the country of residence. This means that foreign buyers do not need to have income or residency in Spain.

Key features of Spanish mortgages for foreign buyers:

• Mortgages are typically offered for a term of 20–25 years . Banks in Spain typically offer non-residents loans for a maximum term of 20–25 years, with repayment due no later than the date the borrower reaches 75 years of age.
• Both fixed and variable interest rates are available. For non-residents, due to higher currency and legal risks, banks often prefer to offer variable-rate loans.
• Monthly installments are calculated based on the client's net income and financial stability,
• The process can be completed remotely until the final signature is made at the notary's office. However, please note that in most cases one in-person visit is required at the beginning of your relationship with the bank.

Main requirements for non-residents applying for a mortgage

While each bank has its own criteria, most require the customer:

1. Demonstrates stable employment or business activity. An employment contract or at least two years of business activity history is required.
2. Has a good credit history in his home country.
3. Maintains a low level of debt. Monthly financial obligations (loans, leases, credit cards) plus mortgage payments in Spain cannot exceed 30-35% of net monthly income .
4. Has the required own contribution and funds to cover the purchase costs

How Much Can Buyers Borrow? Down Payment Requirements and the Role of Property Valuation

Most Spanish banks offer mortgages to non-residents with an LTV (loan-to-value) usually of 60-70% of the property value. Importantly, the bank finances 70% of the lower of the two values :

• purchase price,
• official valuation ( tasación ).

For example:

If the property costs €300,000 and its valuation is €280,000, the bank will allow max 70% of the €280,000 = €196,000 .

Buyers must therefore prepare for:

• 30-40% own contribution (part of the property value financed from own funds)
• approximately 12-15% of the purchase cost (notary, taxes, registry, bank fees, utility connections). These costs vary significantly depending on the region (e.g., the property transfer tax (ITP) is different in Catalonia and Valencia) and the type of property (new vs. used, which affects VAT vs. ITP).

In practice, this means that a total of 45% - 55% of the total purchase amount must come from the buyer's own funds.

What documents should customers prepare before applying for a mortgage in Spain?

To ensure the process runs quickly and efficiently, it is best to prepare the following documents at the outset:

Basic financial documents

• passport or ID card,
• proof of address,
• bank statements from the last 6-12 months,
• the last three pay slips (for employees),
• annual tax return,
• documents confirming other sources of income,
• statements of current loans and financial liabilities,
• credit card and loan statements.

For business owners

• balance sheet and profit and loss account (last 2 years),
• an accountant's statement confirming income,
• business registration documents.

How long does the mortgage process take in Spain?

The entire process from application to disbursement of funds typically takes 6-12 weeks .

The most common mistakes made by foreign buyers and how to avoid them

1. Starting the mortgage application process too late Many buyers take action only after signing a reservation agreement, which can impact the repayment schedule.
2. Submitting incomplete or incorrect documentation: Banks do not accept documents that do not clearly prove income. Spanish banks typically require an official, certified (sworn) translation ( traducción jurada ) of all key documents (e.g., tax returns, employment contracts) that are not in Spanish. If a translation is not available, banks may refuse to perform the simulation.
3. Misunderstanding Mortgage Rules If the valuation turns out to be lower than expected, it may impact the buyer's financing plan.
4. Choosing a property that a bank won't finance. Some banks avoid certain types of properties (e.g., very old buildings or properties with unclear legal status).
5. Comparing mortgage loan offers solely in terms of interest rates Often, the total cost is influenced by factors other than the interest rate itself (fees, insurance, bank requirements).

How can an agency like ours support clients throughout the mortgage application process?

With extensive experience in serving foreign buyers, we guide clients every step of the way, even before they arrive in Spain. Our support includes:

• Preliminary assessment of purchasing options

• Comparison of mortgage offers

We work with multiple banks to select the best options available.

• Assistance in preparing documents

We help you prepare all the necessary documentation to ensure quick and efficient approval.

• Coordination of valuation and all banking formalities

We assist in selecting an appraiser, conduct a property visit with the appraiser, monitor the progress of the process and ensure there are no delays.

• Assistance during a notarial visit

We accompany clients to meetings with the notary and explain in detail the terms of the mortgage loan and the notarial deed.

• Remote assistance – even before clients arrive in Spain

Most steps can be completed online, saving customers time and avoiding unnecessary trips.

Application

A Spanish mortgage is an excellent tool for foreign buyers planning to purchase real estate. The process is transparent and easy to manage when clients understand the rules, prepare the required documents, and work with an experienced agency. We help ensure the entire process is quick, stress-free, and predictable – from the initial consultation to key collection.