You live in the UK, Netherlands, Germany, France, the United States or another country.

But the property you want to buy is in Spain.

So where should you arrange the mortgage?

In your own country or in Spain?

For most international buyers, this is one of the first financing questions worth investigating.

Can a bank in your home country finance a Spanish property?

Sometimes.

But there is an important practical issue.

A mortgage is normally secured against property.

A domestic bank is very comfortable lending against an asset situated within its own legal and registration system.

Taking security over property situated in another country is more complicated.

As a result, many ordinary retail banks do not offer standard residential mortgages secured directly against Spanish property.

There are exceptions, particularly in private banking and for high-net-worth clients.

Another possibility is borrowing against an asset you already own in your home country and using the proceeds to purchase in Spain.

But that is different from taking a Spanish mortgage secured against the Spanish property itself.

Spanish banks regularly finance international buyers

Spain has a highly developed market for mortgages to non-residents.

That does not mean every Spanish bank wants every international borrower.

Far from it.

Each bank has its own criteria concerning:

• countries accepted;
• employment type;
• self-employed applicants;
• company directors;
• income currencies;
• age;
• debt ratios;
• loan size;
• property location;
• loan-to-value.

This is why applying randomly to several banks is not always the most effective strategy.

The objective should be to identify the banks whose lending criteria fit your profile.

What if your income is not in euros?

This is particularly important.

A buyer earning GBP, USD, CHF, NOK or another currency needs to be assessed differently from someone earning euros.

Spanish and European mortgage regulation includes specific protections relating to loans denominated in a currency different from the borrower's income or assets.

As a result, currency can influence which banks are suitable for you.

A Spanish mortgage can preserve capital

Financing the Spanish property locally can allow buyers to retain part of their capital rather than putting the entire purchase price into the property.

For some buyers this is one of the main reasons to obtain a Spanish mortgage even when they could technically pay cash.

Compare the complete structure

Do not compare only the nominal interest rate.

Consider:

• amount the bank is willing to lend;
• fixed, variable or mixed rate;
• mortgage term;
• early repayment conditions;
• compulsory or optional associated products;
• valuation;
• total costs;
• currency exposure.

A lower advertised interest rate is not automatically the better mortgage if the rest of the structure does not fit your circumstances.

Start before you sign for the property

The ideal moment to investigate your mortgage is before committing to a purchase.

Once we know your financial circumstances and approximate purchase budget, we can identify which Spanish banks are likely to be suitable.

Mortgage in Spain® specialises exclusively in helping non-residents and international clients finance property throughout Spain.

We have more than 15 years of experience, operate 100% online and are registered with Banco de España as Real Estate Credit Intermediary D969.

And the cost of our mortgage brokerage to the client is:

0%.

We are paid by the banks.

Buying property in Spain from abroad?

Talk to Mortgage in Spain® before deciding where to arrange your mortgage.