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Mortgage rules in spain.

Do you need finance to help buy your property in Spain?

Not all of our clients are cash buyers as you can imagine. 

Amongst the advantages of using the banks finance as opposed to your include; 

  • Compound appreciation.
  • OPM Other people’s money 
  • Leverage. 

We ́ve explained all of these concepts in other blogs. You can contact us anytime to discuss fincance in spain, we are here to help.


General rules for a mortgage in spain include: 



Interest rates are fixed for the lifetime of loan. This will give good value and stability of payment for SHO clients.


Usually the Maximum loan to value (LTV) for non-residents in Spain is 70%.  However some Spanish lenders restrict this figure to 60%.


British nationals have seen many lenders in Spain implement a tightening of debt to income ratios. They sometimes offer a  lower LTV too. Perhaps Banks are nervous of impact of brexit on the British economy? 


Country properties often value less than asking price. The reason is that Rustica land has little official value. Here the maximum loan to value is 50%. Be careful before you bid on an inland property and talk to us first. 


Banks work off net rather gross incomes in Spain. They wish to see that outgoings are less than incomes! This ratio cannot go above 35%.



It is no longer easy to be a “mortgage broker”. 

All so called brokers must now register with the Bank of Spain.  

Mortgage brokers must now hold public liability insurance just like other professionals.


Lenders since June 2019, are required to define and include any linked products they are trying to upsell  in their APR. We had clients who were offered a rubbish rate if they did not take out the banks’ insurance, this is now against the law. 


On receipt of an offer from the bank the applicant has a mandatory 10 day cooling off period.


If however a new offer has to be issued, this process will start again.


Here is a big one; 

Early repayment penalties previously charged by banks in Spain have been reduced. You can save years off the length of your mortgage with a few overpayments every year.  

In the event of arrears, the Max penalty that lenders can charge have been reduced.

Banks in Spain cannot take action for 1 year or until a set %of the capital borrowed is in arrears.


We work with IMS mortgages. They are an experienced,trusted independent broker and can help borrowers of Spanish property get an excellent deal. We advise you get your finance in place before viewing houses. It is a good time to take advantage of the new restrictions the government has put on the banks! 


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