Spanish Mortgages
Spanish mortgages are becoming increasingly popular as the Spanish property market booms; with Spanish mortgages easily available, more and more foreigners are using this route to buy property in Spain. ValuVillas can advise and help you get the best deal on a Spanish mortgage thanks to our extensive knowledge of the Spanish property and mortgage market.
Obtaining a Spanish mortgage
The growth in the Spanish mortgage market is of course closely linked to the Spanish property boom. The easy availability of attractive Spanish mortgages has increased demand for Spanish property, whereas ongoing demand for property ensures that suitable mortgage packages are available to fulfill that demand.
Three key factors make a Spanish mortgage extremely attractive:
• The entry of Spain into the EU has made the Euro an acceptable ‘hard’ currency like the US Dollar and the British Pound.
• Relatively low interest rates: as low as 3.5%
• Access to mortgages for foreigners.
Whilst UK residents have the option of borrowing from a UK lender to finance an overseas property, many of them prefer to take out a Spanish mortgage instead. Besides the factors mentioned above, it makes far more sense to avoid currency conversion fees and rate risk by repaying the Spanish mortgage using the rental income earned on the Spanish property.
Spanish mortgage options
To buy a property in Spain is straightforward. Usually you put down a 30% deposit and take out the Spanish mortgage on the remaining 70%. Repayment options are flexible, and depending on your age and income, the length of the loan can vary from 5 to 30 years. Typically, mortgages are structured so that the monthly repayment never exceeds 35% of your net family income. The associated fees are also quite reasonable, generally in the 3-4% range.
Of course, obtaining a Spanish mortgage means completing several formalities including assessment of the property value, setting the interest rate, the monthly installment and the repayment period, all of which are based on a thorough review of your financial position and capacity to pay back the loan on time.
Once you have taken a mortgage on your property in Spain, you should consider the options available to adjust or reduce the repayments if you suffer any undesirable changes in your circumstances.
An approach that is becoming increasingly popular in Spain is to offer re-mortgages (re-mortgages have been quite popular in the UK for a while now). Taking a mortgage on the original Spanish mortgage with another bank often reduces the mortgage costs and improves repayment options. There are two options for re-mortgage: automatic and non-automatic, with pros and cons to both. You should seek expert advice from an experienced real estate agent / Spanish property consultant to understand these.
Need a Spanish mortgage? ValuVillas can help!
Although we are not a bank, we have 20 years’ experience of doing business in Spain, so we can advise you on the best deals on low interest Spanish mortgages. In fact, we have been involved with arranging some form of financing in almost 75% of our transactions in Spain.
Valuvillas has several experts with experience and a thorough understanding of the Spanish mortgage industry. With our long-standing presence and the excellent relationships we have forged with local builders and banks, not only can we help you buy excellent properties in Spain but also help you get the best Spanish mortgage terms.
Contact us for a detailed discussion and find out how we can be of help!
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