Spanish mortgage example, based on £232K property

Did you know over 40% of non-residents who buy a home in Spain require extra finance?

We are often asked how a Spanish mortgage could work for a UK buyer wishing to buy a Spanish property, therefore, we are going to start a series of mortgage examples! Here we have started with a working example based on a popular purchase price of €232,000.

 

The Spanish mortgage experts

Our recommended partners at Fluent Finance Abroad have great relationships with the all the leading high-street Spanish banks. As a result, Marc and his team have direct access to the lowest rates and best terms and can guide you through the process and completing the required paperwork.

Normally, the maximum you could borrow is up to 70% of the valuation of your chosen Spanish property. Therefore you must have at least 30% available as a cash deposit. The team can hand pick properties that will fit within your deposit threshold.

Spanish mortgage example, based on £232K property

Spanish mortgage for a property

These 2 bedroom apartments in Cancelada, Málaga are available for just €232,000. This brand new development offers south facing views of the golf course and the sea and is situated in a highly desirable area. View more about this property >>

To help make this example as useful as possible we’ve also included the approximate additional costs that come with a property purchase such as fees and taxes; for this example, it is around 16%.

Property price€232,000

Estimated closing costs – €37.120 (including all taxes & bank mortgage set up fees approx 16%)

Therefore the total cost of purchase – €269.120


Spanish Mortgage Option 1

30% deposit value = €106.720 @ an exchange rate of 1.12 = GBP 95,285
Mortgage value (LTV) 70% (Max lending for non Spanish tax residents from the EU) = €162.400
Cost per month over 25 years @ 2.00% interest rate = €693 @ an exchange rate of 1.12 = GBP 619

In summary, with a 70% mortgage, you could buy this property using a deposit of €106.720 and then monthly installments of €693 over 25 years.


Spanish Mortgage Option 2

40% deposit value = €129.920 @ an exchange rate of 1.12 = GBP 116.000
Mortgage value (LTV) 60% (Avg lending for non Spanish tax residents from the EU) = €139.200
Cost per month over 25 years @ 2.00% interest rate = €594 @ an exchange rate of 1.12 = GBP 530

In summary, with a 60% mortgage, you could buy this property using a deposit of €39,200 and then monthly installments of €594 over 25 years.


Spanish Mortgage Option 3

50% deposit value = €153.120 @ an exchange rate of 1.12 = GBP 136,714
Mortgage value (LTV) 50% (Basic lending for non Spanish tax residents from the EU) = €116.000
Cost per month over 25 years @ 2.00% interest rate = €495 @ an exchange rate of 1.12 = GBP 442

In summary, with a 50% mortgage, you could buy this property using a deposit of €106.720 and then monthly installments of €495 over 25 years.


*Please check with an officially registered currency exchange company for up to date exchange rates, the figures shown are for guidance purposes only. Our partners at Global Currency can offer competitive rates.

Benefits of getting a Spanish mortgage

There are many advantages to getting a Spanish mortgage including:

  • You can offset the weakened £ Sterling as you only tie part of your money up initially and can then easily pay some or all of the balance off when the £ gets stronger without being penalised.
  • Any rental payments you receive from the property can be paid into the same account as the lending bank, which can help to get the finance paid off quicker.
  • The average timescale from applying to receiving an agreed final mortgage offer is just 6-8 weeks. However, to ensure you can view properties and negotiate with the vendor an Agreement in Principle (AIP) for a property you wish you buy can be achieved within two working days!

Organising a Spanish mortgage for your purchase

To discuss the feasibility of a Spanish mortgage for your purchase, we recommend you talk with Fluent Finance Abroad (FFA) who are a highly respected mortgage broker, with expert staff who speak English and will always act in your best interest. To contact FFA please call +34 952 85 36 47 or visit: www.fluentfinanceabroad.com

Alternatively, there are many ways to finance a holiday home through UK financing such as remortgages, loans and/or equity release. To learn more about the financial options available to you, get in touch with our team >>