Property in Spain - Spanish Property

You have come to a decision - you are are going to buy a property in Spain. Where, what and how? There are literally thousands of Spanish properties available all over Spain – so you really need to take a step back and think about the exact type of property and location that will tick all your boxes.

Thursday, October 26, 2006

Obtaining 100% mortgages in Spain

Obtaining 100% mortgages in Spain
Probably because the last few villas of the developments have remained unsold, one forward thinking developer has recently released 5 villas on two developments on the Costa Blanca (Guardamar), and Costa Calida (Sucina) on an excellent scheme – 100% mortgage including costs. The only money payable up front is a 3000 Euro holding deposit – although of course you have to pay the mortgage after.

Due to the rising costs here in Spain, it’s a pity that more don’t jump on the ‘100% mortgage’ bandwagon – especially as recent research shows that many people in the younger age groups are now looking to invest in property in Spain, generally the group with less ‘spare cash’. Spain is the perfect getaway for young working couples to own a holiday home - being only two hours away from the uncertain British climate and ideal for a long weekend away from the hectic pace of UK life.

However if you don’t fancy buying in Guardamar or Sucina, there are other ways to obtain 100% mortgages on property in Spain. Although the majority of banks will lend only 70% to non-residents, some are now upping that to 80%. Given that this amount is based on the valuation, rather than the purchase price, the amount offered can be 100% in some cases.

An example is the purchase of my own property. The asking price was 250,000 Euros, however the valuation came in at 368,000 Euros. At the 80% lending rate, the mortgage offer was 294,000 Euros giving me 100% mortgage plus the 10% costs and money left over for improvements.

Mortgages in Spain can now also be obtained up to 35 years, depending on age.
When you receive your mortgage offer, it is advisable to use it to ‘barter’ with other banks as often, another bank will improve on your original offer.

Buying off plan is also another excellent way of getting a good mortgage offer – if you have the initial down payments to start with. It is usual with off plan property to have paid 50% within the first 3 months after reservation. However, when the final 50% is due on completion, you should be able to borrow 70-80% of the final valuation. With a development taking up to 2 years to complete, and taking into account price rises over that period, it is quite likely that you will be able to borrow 100% of the intial purchase price.

Alternatively, if you already own a property in Spain that is mortgage free, you can borrow against it and often get enough for 100% mortgage for a second property.

I am not saying its easy to get a 100% mortgage in Spain, just that it can be done. A lot depends of the individual valuer and the bank used, and the type of property being purchased. As valuations are based on the m2 of the plot and the property, by and large the best type of property is a villa on a spacious plot although again, this is not always the case as we have a couple of spacious ‘key ready’ apartments that have been valued well over the asking price.

For help and advice on Mortgages, or property purchases in Spain please contact


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