2020 is finally here, and with the new decade comes the thought of new year’s resolutions and the possibility of investing in your dream property in Spain. We’ve based this month’s Spanish mortgage example on a new development of stunning 1 bedroom apartments that are perfect for enjoying the Spanish climate the whole year-round.

Pilar de la Horadada, Alicante, Valencia

These ultra-modern 1 bedroom apartments are located in Pilar de la Horadada, on the coast of Costa Blanca. This lively Spanish seaside location has easy access to and from international airports and is only a 7 minute drive to the beach, yacht club and promenade. From there you can experience the taste of classic Spanish cuisine and enjoy the busy nightlife.

Despite being under €100,000 euros, these properties have been built to a very high standard with quality finishings throughout the double bedroom, large bathroom, and spacious living area with an adjoined open plan kitchen. These apartments also feature pre-installed heating and cooling air conditioning units, TV, aluminium shutters, internet, alarms, gated entrance and an architect’s 10 year guarantee.

The choice is yours between a ground floor apartment with patio doors and sun terrace leading into the private walled front garden, or a top floor penthouse with a front facing sun terrace and spacious private roof solarium. These apartments are considered ‘too good to miss’ as we have seen huge demand for spacious quality one bedroom apartments, so you’re really being spoilt for choice.

View more about this property >>

Will a Spanish mortgage be right for you?

If you’re undecided whether to take out a Spanish mortgage to help you afford your Spanish property, you should consider the following benefits:

  • Pay off your mortgage with no penalties – Offsetting the low value of the £ sterling, so once the exchange rate improves you can pay off your mortgage with no penalties.
  • Quicker process – You might be able to afford your property sooner by taking out a Spanish mortgage.
  • Repay with rent – If you are hoping to let your property, the rental returns can help pay towards the mortgage repayments.
  • Bigger budget – With excellent Spanish mortgage rates available, you may have the opportunity to increase your budget and purchase a home in Spain that’s bigger and/or better.

If you want to learn more about the benefits of having a Spanish mortgage, let us put you in touch with one of our recommended mortgage advisors. Contact us here >>


Spanish mortgage rate example, option 1

In our example, we have allowed for the additional fees such as taxes, community fees and the legal fees that you will incur when you buy a Spanish property, to give you a more realistic mortgage figure.

Property price – €99,900
Estimated closing costs including all taxes & bank mortgage set up fees at approximately 15% – €14,985
Therefore the total cost of purchase – €114,885

Funds needed to complete (including 35% deposit value & fees) – €49,950 @ an exchange rate of 1.17 = GBP 42,692
Mortgage value (LTV) 65% – €64,935
Cost per month over 25 years @ 1.90% interest rate – €275.23 @ an exchange rate of 1.17 = GBP 235.24

In summary, you could buy this Spanish property using a 65% mortgage with a combined deposit and fee costs of €49,950 and monthly instalments of €275.23 over 25 years.


Spanish mortgage example, option 2

In our second example, we have allowed for the additional fees such as taxes, community fees and the legal fees that occur when you buy a property.

Property price – €99,900
Estimated closing costs including all taxes & bank mortgage set up fees at approximately 15% – €14,985
Therefore the total cost of purchase – €114,885

Funds needed to complete (including 35% deposit value & fees) – €53,400 @ an exchange rate of 1.15 = GBP 45,381
Mortgage value (LTV) 65% – €48,950
Cost per month over 25 years @ 1.90% interest rate – €203.10 @ an exchange rate of 1.11 = GBP 173.81

In summary, you could buy this Spanish property using a 55% mortgage with a combined deposit and fee costs of €59,940 and monthly instalments of €232.89 over 25 years.

*Please check with an officially registered currency exchange company, such as our partners at A Place in the Sun Currency, for up to date exchange rates. The figures shown are for guidance purposes only.


Financing your Spanish property in the UK

It’s very common to see individuals who prefer to keep their finances close to home when investing in property in Spain. If that’s the case for you, our recommended UK-qualified financial advisors will be more than happy to help you. From loans, remortgages and equity releases, they can assist you in your property purchase and ensure the process runs smoothly from start to end.

Currency transfer

When buying overseas it is important to have plans in place on how to transfer funds to pay for the property. Some buyers decide to use their bank but this will typically be charged at higher rates than a specialist currency broker.

We would recommend using a specialist such as our friends at A Place in the Sun Currency, as savings on the exchange rate can be used to pay additional costs such as legal fees and furniture packages.

If you would like more information on currency transfer, contact us >>

Obtaining a Spanish mortgage on a property

If you’ve decided that a Spanish mortgage will be the best option for you to purchase your dream home, we can help you move this process forward. The bilingual experts at Fluent Finance Abroad (FFA) will take some of your stress away by liaising with the top high-street banks in Spain to get you the best exchange rates.

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