If you’re not a Spanish resident and considering buying a house in Spain with a mortgage, it’s essential that you know the conditions and requirements.
To start with, where do you pay your taxes?
If you’ve not filed a tax return in Spain covering the last year (even if you’re already living there) you will be classed as a foreign tax resident.
Major Spanish banks like Santander or CaixaBank have separate packages for non-residents that come with significant differences.
Santander has a mortgage simulator for you to get an idea of costs.
Below, we will outline what Spanish mortgages for non-residents look like.
Mortgages for non-residents or foreigners: characteristics
The mortgage requirements for non-residents are more demanding than for Spanish citizens. This is because the bank needs to safeguard against non-payment on the part of a non-resident.
As Spanish mortgage expert Katherine Walkerdine explains, new laws mean that if currency rates go 20% against a client they have the right to change their mortgage into their income currency.
This, among other factors, means some Spanish banks will outright refuse to lend to non-residents.
The main characteristics of a non-resident mortgage in Spain are:
- Shorter payment period, usually a maximum of 20 years
- Whereas Spanish tax residents can borrow up to 80% of a property’s price, non residents can normally borrow up to 70%.
- Some banks, like Caixabank, will offer up to 70% loan-to-value (LTV) for non-residents but only 50% for loans in excess of €1 million.
- Some Spanish banks will only offer fixed-rate mortgages, often with higher interest rates. Santander’s mortgage package for non-residents allows discounted interest rates if you take out another Santander financial product, like life insurance, for example.
- Similar to usual mortgages in Spain, the mortgage instalment together with other debts the applicant has, cannot exceed between 30% and 40% of the net income.
- Many Spanish banks will require proof of income over a certain amount – BankInter, for example, requires income over GBP 40,000 for British clients, while CaixaBank requires a minimum of €45,000 or equivalent annual income.
Mortgages for non-residents or foreigners: required documentation
- A photocopy of passport and your NIE document, which is a tax identification number in Spain. You can apply for a * NIE at a Spanish embassy or consulate in your country of residence.
- The certificate of being a non-resident in Spain.
- A bank statement showing your paycheck and the last three paychecks deposited.
- The certificate of fiscal (tax) residence and the fiscal declaration.
- Documentation of the house being bought: deposit contract or purchase contract.
- Credit risk report.
All the documentation needs to be translated, but can be managed and processed via the Internet and phone. You will also have to open a bank account in Spain to facilitate the house purchase.
Bear in mind that you’ll likely need to pay for the services of a lawyer and a notary when negotiating a house purchase – agency fees can also be between 2-5% of a house price.
You will also need to officially translate any documentation into Spanish. This will include proof of your income and any other relevant documentation.
More information: Mortgages for non-residents in Spain
Read our Q&A here answering the question: Can foreigners buy a property in Barcelona? We also have a guide on getting a TIE card in Spain.
Lasose Properties & Investments is an experience real estate agency with exclusive listings of houses for sale in Barcelona.. Our experienced team of English-speaking real estate agents are specialised in Barcelona relocations and can help make your move to Barcelona as smooth as possible.
