19 May 2021

Mortgages for non residents in Spain

Published in Real estate

Spanish mortgages for non residents are a great way to finance a property purchase, but there are bureaucratic challenges.

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.

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