Spanish property mortgages: main things  
to bear in mind

Warning: The information set out below is a general guideline provided by DOMENECH ABOGADOS. Specific advice should be sought before any action in reliance on it is taken, as explained more fully in this website's legal notice.

Once you’ve found your dream home in Spain and are ready to take the plunge and buy, you may also decide to finance your acquisition by getting a mortgage from a Spanish bank.  

DOMENECH ABOGADOS can refer you to efficient English-speaking bankers used to dealing with foreign investors who can help you locate the most suitable mortgage on the best terms and conditions. We can even put you in touch with English-speaking brokers who’ll scan the market for the best deal from those offered by a large number of lenders. No such referral results in any payment to us, so we’ll only suggest you go to X or Y if we think it’s in your best interests to do so.

Remember, everything is negotiable. So it could be useful to have lawyers speaking for you in relation to certain clauses, for example, to:

  • enable you to make additional, non-programmed mortgage payments free-of-charge; or
  • ensure that the interest review clause doesn’t come as a horrible shock.

The mortgage will be the object of another deed to be signed simultaneously with the purchase deed at completion before the Spanish notary.  Therefore, you’ll want to make sure your chosen bank and the notary’s office work in swift coordination: that’s also where DOMENECH ABOGADOS steps in, monitoring and pushing all parties involved to avoid any unnecessary delays or unpleasant last minute surprises (just think of the expense and trouble of having to come to Spain twice to sign a deal that went wrong on signature day because of unexpected problems). 

The process of contracting a mortgage for your intended acquisition of property in Spain is likely to take from three to six - or even eight - weeks from the moment you find a bank which is receptive to your application. This is important to bear in mind, particularly if you’re signing a deposit (arras) contract with the seller which sets a long-stop date by which completion must take place. Otherwise, missing the agreed deadline will result in losing the deposit you’ve paid.

Also take into account that the mortgage involves in its own right a series of expenses, and the bank will require you to fund those in advance. These are principally:

  • a valuation of the property by an independent expert chosen by the bank, which will be used to determine whether the amount you need in finance is within limits the creditor is ready to accept;
  • notary and land registry fees (the mortgage deed, like the purchase deed, also needing to be inscribed in the land registry);
  • an insurance covering the risk of destruction of the property by events such as fire and similar causes;
  • stamp duty, being charged as a percentage of the liability guaranteed by the mortgage (usually 0.50%, but this may vary from region to region); and
  • expenses triggered by the bank opening your mortgage account with them (these vary from bank to bank, so it can be worth shopping around for the best deal).
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