The Spanish government is interested in issuing loans to foreigners for the purchase of real estate. Many of these loans come with great mortgage conditions. Let’s take a closer look.
Content:
- How do non-resident mortgages work?
- Best mortgage loans in Spain
- Top banks for mortgage loans in 2021
- How can you the best mortgage?
- We’ll help you find property in Spain
How do non-resident mortgages work?
To get a mortgage in Spain, you do not need to have local citizenship or reside in the country.
Who can qualify for mortgage loans for non-residents?
Non-resident mortgages are for people who do not have Spanish citizenship. However, there are several distint groups who qualify:
- Non-residents from the European Union.
- Non-residents from countries outside the European Union. Depending on the citizenship, the conditions may be different since they depend on the agreement signed by both countries.
- Foreigners who wish to settle in Spain.
- Spaniards with a residence in another country.
Requirements for mortgages for non-residents
Organizations are stricter on foreigners applying for a mortgage in Spain, therefore they need to have:
- NIE: identification number for foreigners.
- Spanish bank account (optional): helpful for paying fees, taxes and expenses that may arise.
- Translation of documentation.
- Credit risk report: employment contract, salary, tax return, statement from place of work.
Non-residents must also submit a document that outlines their economic activities in their current residence and work. Depending on the country, this certificate can have the following titles: SCHUFA (Germany), Experian (UK), Transunion (USA) or Transunion CRIF (Russia).
Mortgage conditions for non-residents
Banking organizations understand that foreigners are seeking a mortgage in Spain for a second residence, so the conditions are stricter than for citizens purchasing a first house.
You may encounter these conditions:
- Higher percentages.
- Shorter maturity periods - no more than 20 years.
- Less financing - the bank will provide 60% or 70% of the house’s value.
How much will a non-resident pay on the mortgage?
If you purchase a house for 300,000 euros, the monthly fees will be as follows:
- Down payment of 150.000 euros.
- Payback period of 20 years.
- Monthly fee of 660.93 euros.
As you can see, the money you have to immediately deposit is half the cost of the home.
Best mortgage loans in Spain?
With the best mortgages available in August, this is the best time to finance the purchase of your future home. Check their terms and conditions and find out which one suits you best.
Smart mortgage EVO Bank
The best mortgage of 2021 at a variable rate was from EVO Bank. The Smart Mortgage has the lowest percentage on the market: EURIBOR is + 1.90% in the first year, EURIBOR is + 0.88% from the second to the fifth year, EURIBOR is + 0.78% from the sixth to the tenth year and EURIBOR is + 0.68% in the final year. Another advantage of this loan is that your interest falls if EURIBOR rises:
- The percentage is reduced by 0.10 points if the EURIBOR is between 2% and 3.99%.
- The percentage is reduced by 0.20 points if the EURIBOR is between 4% and 5.99%.
- The percentage decreases by 0.40 points if the EURIBOR is 6% or higher.
EVO Bank (Bankinter Group) allows you to fully apply for this mortgage online (notarized signature only). It finances up to 80% of the value of a conventional house with a maximum maturity of 30 years and no opening or early depreciation fees whatsoever.
Variable mortgage COINC
The COINC variable mortgage, which has an interest of 1.89% in the first year and EURIBOR + 0.89% the next, comes in second. Its main strength is the competitive interest rate that can be provided without the need to purchase other products such as insurance, wage domiciliation, etc.
COINC is Bankinter’s online mortgage brand. Hence, these mortgages can be ordered online through customer service.
With a COINC variable mortgage, you can finance up to 80% of a regular housing price or up to 60% of a secondary housing purchase within 3 to 30 years. There are no commissions.
Open mortgage from Openbank
Bronze goes to the Open mortgage from Openbank (Santander online bank). Its interest for the first year is 1.95%, and for the next year, it’s EURIBOR + 0.95%. This price has a bonus of 0.30 for income domiciliation and 0.10 for house insurance.
Openbank will also refund you the cost of the appraisal if you entrust it to them. Moreover, if you decide to do it yourself, they will reimburse you 230.70 euros after signing the contract, provided that the assessment is done by an Agency approved by the Bank of Spain.
The application process for a variable open-ended mortgage must be completed online. Openbank will appoint a personal manager who will accompany you from the first to the last transaction.
With this mortgage, you can finance up to 80% of your house purchase with a maximum term of 30 years (70% and 25 years for a second residence). It has no opening commission or partial early amortization, but full early amortization stands at 0.25% in the first 3 years and 0% in the following.
Fixed mortgage COINC
The best-fixed mortgage on the market is the COINC mortgage from the online brand Bankinter. Your interest depends on the period that you choose for the refund:
- 1.25% if you pay the amount after 10 or 15 years.
- 1.30% - after 20 years.
- 1.35% - after 25 years.
- 1.40% - 30 years.
What sets this loan apart is that your interest can be earned without hiring additional products from the organization. It has the cheapest fixed-rate mortgage on the market.
COINC can finance up to 80% of the housing purchase (60% if it is secondary housing), for 3 to 30 years. It would be best to keep in mind that the minimum amount is € 30,000 and the maximum € 800,000. Your fixed mortgage can have a maximum of 2 holders.
Mortgage from Ibercaja
The second place in this ranking is taken by Ibercaja, whose one-step mortgage has an interest of 1.30% up to 20 years in exchange for the domiciliation of the owners’ salaries, for a total of at least 2,500 euros per month.
The minimum amount is EUR 200,000 and the maximum can be up to 80% of the cost of an ordinary house. The maximum return period is 20 years.
Ibercaja does not charge opening fees or any total or partial early depreciation.
Top banks for mortgage loans in 2021
Currently, the mortgage offers in Spain are desirable. Below, you can see which organizations provide the most attractive house loans. Pick the ones that interest you the most depending on your profile.
- EVO Bank, if you are looking for a very affordable mortgage that can be obtained online.
- COINC if you are looking for a budget mortgage online.
- Openbank if you are looking for a reasonable price and have a good profile.
- MyInvestor if you have a high income and want a low-interest rate.
- Targobank if you want to pay low fees and are comfortable paying 2 insurances.
- Kutxabank if you do not mind hiring other products to get a good percentage.
- ING if you want to get your money back in more than 30 years.
- BBVA if you want to get a good percentage and arrange other bank products.
- Hipotecas.com if you want to have a personal manager who advises you throughout the entire process.
How can you find the best mortgage?
- Interest rate. This is what affects the final mortgage price the most. Ideally, if you want to take out a variable mortgage, it should be pegged to EURIBOR and the interest should be 1% or lower. If you prefer a fixed mortgage, the interest rate should be around 1.50% or lower.
- Many banks will ask for additional products (e.g. insurance, cards) if you want a low-interest rate. You will need to ask about their pricing, calculate whether it is profitable or not, and assess whether you are ready to sign up for these services throughout the entire mortgage.
- Commission. You should see if the mortgage includes any commission, such as opening or early repayment.
We will help you find a property in Spain
If you are interested in real estate in Spain, visit our website Spain.Real-Estate. Explore the places you like and contact our specialists. Your dream can come true!