Foreign citizens applying for a mortgage to purchase property in Spain should not expect financing exceeding
There are two types of interest rates in Spain:
- variable rate: (tasa variable) it is aligned with the European Central Bank's base rate and can fluctuate. Most mortgages work on a variable rate.
- fixed rate: (tasa ﬁja) it remains unchanged throughout the payment term. Although initially higher than a variable rate, the borrower does not run the risk of it increasing rapidly in years to come.
Sometimes, banks provide mixed rates (tasa mixta): fixing the rate for the first
Santander, BBVA and Banco Popular Español are Spain's major banks with branches in every large city. However, banks have
Mortgage applications in Spain require the following documents:
- income tax return for a year;
- certificate of no arrears issued by the tax authority:
- payslips from permanent employment for the previous year;
- savings account statement for the latest three months;
- certificate of no arrears (for loans in other countries);
- statement of account surplus with a bank in the country of permanent residence;
- NIE (Número de Identidad de Extranjero) — tax identification number assigned to foreign buyer in Spain once they have put down a deposit for the property.
All the documents must be translated into Spanish.
Obtaining a mortgage in Spain will incur the following costs:
- banks usually perform due diligence and charge a property assessment fee — about
€500 (one-off payment);
- some banks require borrowers to take out life and property insurance plans with them;
- mortgage application processing —
1–2% of the mortgageamount;
- stamp duty — 1.8%;
- prepayment charge — 0.5% for the first five years, then 0.25% for next years.