Christmas and New Year are over once again, and with the January blues hitting the UK hard, we’ve based this month’s Spanish mortgage rates example on a bargain 3 bedroom villa that is perfect for enjoying the Spanish climate the whole year round – ideal for beating those winter blues before they set in!
Pilar de la Horadada, Alicante property – Spanish mortgages example
This ultra modern, newly built 3 bed, 2 bath villa is located in a truly fantastic location frontline to a premier golf course. It also benefits from being conveniently close to the local shops, restaurants, marina and beautiful sandy beach.
The villa features high ceilings, a spacious open plan living/dining area, and a superb kitchen with breakfast bar. There is also a vast private solarium with stunning views overlooking the golf course.
Why should you consider a Spanish mortgage?
If you are looking for extra funding to purchase a property in Spain, then Spanish mortgages can be a great strategic move that offers a number of benefits, including:
- Offsetting the low value of the £ sterling, so once the exchange rate improves you can pay off your mortgage with no penalties.
- Being able to afford and buy your property sooner.
- 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 are hoping to let your property, the rental returns can help pay towards the mortgage repayments.
Read more about the benefits of choosing a Spanish mortgage or talk to our recommended advisors.
Spanish mortgages rates example, option 1
In our 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 – €181,900
Estimated closing costs including all taxes & bank mortgage set up fees at approximately 14% – €25,466
Therefore the total cost of purchase – €207,366
Funds needed to complete (including 35% deposit value & fees) – €89,131 – at an exchange rate of 1.11 = GBP 80,298
Mortgage value (LTV) 65% – €118,235
Cost per month over 25 years @ 2.00% interest rate – €505
In summary, you could buy this Spanish property using a 65% mortgage with combined deposit and fee costs of €89,131 and monthly installments of €505 over 25 years.
Spanish mortgages example, option 2
In our 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 – €181,900
Estimated closing costs including all taxes & bank mortgage set up fees at approximately 14% – €25,466
Therefore the total cost of purchase – €207,366
Funds needed to complete (including 45% deposit value & fees) – €107,321 – at an exchange rate of 1.11 = GBP 96,685
Mortgage value (LTV) 55% – €100,045
Cost per month over 25 years @ 2.00% interest rate – €427
In summary, you could buy this Spanish property using a 55% mortgage with combined deposit and fee costs of €107,321 and monthly installments of €427 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.
Obtaining Spanish mortgages on a property
If you want to know more about Spanish mortgages, our recommended advisors are available to help you. The bilingual, friendly advisors at Fluent finance Abroad (FFA), liaise with the top high street banks in Spain to get you the best rates.
Financing your Spanish property in the UK
If you want to keep your finances closer to home, our UK advisors can offer unbiased guidance and assistance. From remortgages, equity release and loans, they can help release funds from the UK to assist towards your property purchase.
For more information, please download our latest brochure here or contact us directly on 01202 971614.
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 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 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.