Mortgage rates in Spain in 2023

Spanish banks are happy to cooperate with foreign citizens and give them mortgage loans. This service will allow you to purchase housing and pay its cost gradually or make a profitable investment. So, many people buy apartments in tourist regions and then rent out housing to visiting guests.

The current situation in the mortgage market

If you decide to use a loan program, you will be wondering how much is the rate for a mortgage in Spain. At the moment, residents and non-residents of the country can use lending services, but the conditions for issuing a loan will be different. Residents can count on an amount that will cover up to 80% of the required amount, non-residents are given smaller amounts - no more than 70% of the value of the object. The amount of the loan is calculated on the basis of the assessment of the housing itself, which is indicated in the real estate document. At the same time, banks calculate a smaller amount, which must be taken into account when submitting an application.

Mortgage loans are issued for a period of 5 to 30 years, payment programs may be different and the conditions depend on the rules of the financial institution. European banks adhere to a system for calculating rates, where fixed, floating or mixed schemes appear. We propose to consider the interest rates on mortgages in Spain in detail:

• Fixed. You pay a certain amount every month, which is calculated depending on the size of the loan and the loan term. This rate is considered high, but the bank does not have the right to change the amount of the monthly payment, so you will be protected from possible changes in the exchange rate or economic collisions in the future.
• Floating. Rates are calculated depending on the established interbank values and can change every six months or a year. Such a system is considered profitable, since the size of the monthly payment will be quite low. However, there is always the possibility that the size of the payment will increase.
• Mixed. For the first few years, you pay fixed amounts, the rest of the period the amount of the monthly payment may vary.

Currently, the interest rate is in the range from 2.5 to 3.5% per annum and in this form the offer looks very attractive to Russians.

How to apply for a mortgage

To obtain a loan, you must contact the bank branch in person, through your representative, or get a preliminary answer by sending an application by phone. The package of documents for obtaining a mortgage consists of the following certificates:

• Passport;
• a copy of the contract of sale;
• a tax return showing income for the previous year;
• extract from the credit bureau;
• a certificate from a bank in Russia, which confirms that the applicant has funds;
• tax number of a foreign citizen.

The last item on this list raises the most questions, but the NIE or tax number of a foreign citizen is issued quickly and without any problems. This document is issued when you need to sign an agreement or after the buyer has paid a deposit for the selected property. Documents must be translated into Spanish and notarized, in some banks to obtain prior consent, it is enough to send a passport in any convenient way. All other documents are submitted to the branch upon signing the loan agreement. 

The impact of the modern economy

Recent events in the world have shown how the economies of all countries are connected with each other. The instability of the exchange rate and events in the international securities market also affected the state of the Spanish economy. However, the country's banking system did not experience strong shocks, so the conditions for issuing loans did not change. Local financial institutions, on the contrary, try to attract the maximum number of customers. So, some banks accept applications online, and you have the opportunity to apply for a mortgage while in Russia.  

Foreign citizens buy real estate in the country for several reasons - legalization and earnings. If you plan to apply for a residence permit, you can use the purchase of housing as the main argument and mortgage agreements are treated equally as fully redeemed real estate. In addition, the process of applying for a loan does not take much time and it is enough to provide standard documents to apply. Most people who want to buy an apartment or cottage in Spain turn to special agencies. Firstly, here you can find a database of real estate from different regions, so it will not be difficult to find a suitable option for your family. Employees of companies will help in collecting documents, talk about the pros and cons of living in different cities, and also take care of all communication with consular officers.

The international economic situation in the real estate market did not affect the desire of many foreign citizens to settle in Spain. The number of residents is constantly increasing, so the cost of housing will be quite high. Particularly high prices are set for housing located in large metropolitan areas or in tourist regions. Such a property is perfect for settling here with the whole family or renting it out.

Recommendations for borrowers

If you decide to use loans to buy property in Spain, here are some tips to help you choose the most successful housing option:

• Determine the purpose of the purchase. Depending on the purpose for which the property is bought, criteria should be established for the objects. So, for living it is better to choose an apartment in a large city or cottages in the suburbs, which are perfect for the whole family.
• Set a budget. Even taking into account the use of a mortgage, analyze your finances and set an upper limit for the purchase. We recommend that you count on an amount of no more than 60% of the value of the object, so that later there will be no problems with making the first payment.
• Collaborate with agencies. In order to carry out the transaction quickly and without any problems, we recommend that you contact the agency of the appropriate orientation. In such a company, you will be offered a real estate database for study, help you collect all the documents and give a complete breakdown of the real estate market in Spain.

Mortgage agreements are very popular in Spain, so banks develop attractive and favorable conditions for their customers. You can realize your dream and start your own business in Europe or make a profitable investment by buying an apartment in a European resort.

Requirements for borrowers

Despite the fact that each bank develops its own rules and requirements for its customers, there are several common standards. First of all, you need to prove your solvency. The best proof will be a document from another bank, which confirms that you have funds in the right amount. At least 40% of the specified amount must be paid as the first payment, so it is important to establish the amount of the future property in advance.

Banks pay special attention to ensuring that all these incomes are completely legal. You will be asked for a tax return and a certificate from the credit bureau, which will demonstrate that you have no debt obligations. Spanish banks also turn to Russian colleagues and ask for the applicant's credit history in order to obtain accurate information about the number of loans taken and their history. It is impossible to say for sure that the presence of problems with the bank in the past will affect the new contract, but it is the factor that will tilt the decision not in your favor.

The last recommendation concerns the fact that you will be able to apply to several banks and consider offers from different institutions. This will allow you to choose the best option and make a good deal. We advise you to start looking for a suitable bank with a consultation with a realtor or lawyer, as many real estate agencies work closely with banking institutions. 

It is quite possible for a foreign citizen to apply for a mortgage in Spain, but you will have to put up with strict bureaucratic standards. In such a situation, the easiest way is to contact a qualified specialist so that he controls the entire process of collecting and preparing documents. In this case, you do not have to learn all the subtleties on your own and you can fully rely on the professionalism of an experienced agency employee.