Most buyers on the Costa del Sol finance part of the price with a Spanish mortgage. This page explains how it works for international buyers: how much banks lend, what they ask for, who pays which costs and the steps before you sign. It is general information, not financial advice. Rates and conditions change, so always compare offers.
How much can you borrow?
- Residents in Spain can usually borrow up to about 80% of the price or the valuation, whichever is lower.
- Non-residents usually get up to 60–70%, so you need a larger deposit.
- On top of the deposit, set aside about 10–13% of the price for purchase costs: transfer tax (ITP, 7% for most resale homes in Andalusia), notary, land registry and your lawyer.
- Banks normally want all your monthly debt payments, the new mortgage included, to stay below about 30–35% of your net income.
- Terms are usually up to 30 years for residents and 20–25 years for non-residents, and the loan normally has to be repaid by the time you are 70–75.
What the bank will ask for
- Passport and NIE (your Spanish foreigner identification number).
- Proof of income: employment contract and recent payslips, or tax returns and accounts if you are self-employed.
- Your latest tax return, and a tax residence certificate if you live abroad.
- Bank statements for the last six months, details of other loans and a credit report from your home country.
- Sworn translations of documents that are not in Spanish, when the bank asks for them.
- A Spanish bank account, from which the monthly payments are taken.
Who pays the costs?
Since the mortgage law of 2019 (Ley 5/2019), the bank pays the notary's fee for the loan deed, the land registry, the gestoría and the stamp duty on the mortgage (AJD). You pay the valuation (tasación) and any copies of the deed you ask for. The valuation must be done by a valuation company approved by the Banco de España, and the bank has to accept a valid valuation from an approved company that you commission yourself.
Fixed, variable or mixed?
- Fixed: the same rate for the whole loan. Predictable payments, usually a higher starting rate.
- Variable: a margin on top of the 12-month Euribor, reviewed once or twice a year. Payments go up and down with Euribor.
- Mixed: fixed for the first years, then variable.
Compare offers on the annual percentage rate (TAE), not only the interest rate. Banks often lower the rate if you take other products, such as insurance or paying your salary into the account, and those products have their own cost. A bank may ask for home insurance, but it has to accept an equivalent policy from another insurer.
If you earn in another currency than euros, remember that your monthly payment in euros stays the same while the exchange rate moves.
The steps before you sign
- Offer: the bank gives you the binding offer on a standard European form (FEIN) and a sheet of warnings about the loan (FiAE).
- Ten days: at least ten calendar days must pass between receiving the FEIN and signing. Use them to compare and ask questions.
- Meeting with the notary: at least one working day before signing, you meet the notary of your choice, who checks that you have received the documents and explains the loan. This meeting is free of charge.
- Signing: the loan is signed before the notary, usually on the same day as the purchase deed.
Paying off early
The law caps the fee for repaying early. On a variable-rate mortgage it is at most 0.25% of the amount repaid in the first three years, or 0.15% in the first five years, and nothing after that. On a fixed-rate mortgage it is at most 2% in the first ten years and 1.5% after that.
Mortgage brokers
A mortgage broker compares offers from several banks for you and can help with the paperwork, which is useful if you don't speak Spanish or are not resident. In Spain, mortgage brokers (intermediarios de crédito inmobiliario) must be registered with the Banco de España or with the regional authority, and must tell you in advance what they charge.