Investment approach
Non-resident mortgages in Spain: the real terms, not the adverts
For non-residents, banks usually lend 60–70% of the lower of two figures, the agreed price or the valuation, not of the seller's asking price.
For a non-resident, Spanish banks usually finance 60–70% of the lower of two figures: the agreed purchase price or the bank's valuation of the property (tasación). The buyer covers the remaining 30–40% of the value, and taxes and transaction costs come on top. All told, an investor may need up to half of the property's value from their own funds.
What the bank expects from the borrower
The bank looks at verified income from all sources combined. There is no single minimum: each bank sets its own threshold, based on the loan amount and the borrower's other debts. Debt repayments should not take up more than about 35% of income. Banks generally prefer income in euros or in a currency with a predictable exchange rate.
Mortgage terms for non-residents are usually shorter than for residents: 20–25 years rather than the standard 30.
Rates and lenders
Rates for non-residents are usually higher than for residents and depend on Euribor, the borrower's profile and the bank. A bank only quotes an exact rate against a specific application, and last year's survey figures date quickly, so compare several banks at the time you apply. Products designed for non-residents are offered by large national banks such as Santander, Bankinter and CaixaBank, as well as by specialist brokers.
Why a mortgage does not always suit an investment project
In a short buy–renovate–sell cycle, a loan adds interest costs. The bank also sets conditions on the state of the property, and these get in the way of a quick renovation. Base the financing decision on the holding period and the exit strategy, not just on whether a bank will lend.
Questions and answers
Can I get a mortgage without an NIE?
No. An NIE is mandatory for any loan agreement in Spain, so you need to obtain one before applying for a mortgage.
Will the bank finance the renovation together with the purchase?
Some banks offer separate renovation loans. As a rule, though, that is a stand-alone transaction with its own assessment of the cost estimate for the works, not an automatic extension of the purchase mortgage.