Mortgage loans in Spain for Russians and foreigners

Mortgage loans in Spain for Russians and foreigners

Buying a house in Spain is as a foreigner, who does not have a permanent residence in the country, is common practice. When buying property in Spain many non-residents will apply for a mortgage. Consider the following details to obtain loans in Spain for non-residents.

Content:

Mortgage loans in Spain

Mortgages in Spain are one of the most popular options for buying a house abroad. Low interest rates stimulate borrowers’ demand, and they can count on 1-2% per annum.

According to Tranio, the largest overseas property directory, every second house-buyer takes out a mortgage in Spain. You do not need to have Spanish citizenship to get a mortgage here.

The following persons can obtain a mortgage in Spain:

  • non-residents from the countries of the European Union;
  • non-residents from countries outside the European Union: conditions may be different depending on the country of residence since rules depend on the agreement signed by both countries;
  • foreigners who want to settle in Spain;
  • Spaniards residing in another country.

Mortgage loans in Spain for Russians and foreigners

Details of mortgage registration

The percentage of financing for non-residents is usually 60-70% of the housing cost. In addition, monthly payments cannot exceed 30–35% of their income.

Usually, mortgage loans for expats in Spain are for a minimum term of 5 years and a maximum term of 30 years, and the buyer’s age at the end of the mortgage period must not exceed 75 years.

It is essential to note that each organization has different risk criteria, and these are determined by the applicant’s profile and the country of residence. A surety for non-residents is not usually considered as they reside outside of Spain.

Types of mortgage loans in Spain

Thus, mortgages can be classified according to the interest rate, the instalment type, the typology of the financed real estate, and other aspects. Based on the interest rate, the following types of mortgages are distinguishable.

Fixed rate mortgage

The interest rate characterizing this type of mortgage does not change during the entire loan term, and because of this, the instalments remain constant throughout the loan period.

Such a mortgage is of interest when the negotiated flat rate is attractive enough. This mortgage has very high costs in debt replacement (compensation for interest rate risk may be 4% or even more). Therefore, it is necessary to analyze the terms of the contract carefully.

Variable-rate mortgage

Variable-rate mortgages have monthly standing payments during each payment period. It should be noted that in Spain, the majority of loans usually refer to this type of mortgage.

Mixed rate mortgage

This type of mortgage combines one fixed rate with another variable. The variable interest is set based on the Euribor rate, while the other will be the fixed interest that was agreed on in the contract.

Mortgages for foreigners

It is possible to issue a mortgage in Spain to a non-resident by fulfilling the following conditions:

  • opening an account in a Spanish bank,
  • appraisal of an apartment in Spain;
  • preparation of the necessary documents and sending them to the bank;
  • pending approval;
  • making an initial payment by the client;
  • execution of the contract.

To buy real estate in Spain on a mortgage, you must prepare all the required documents in advance.

Required documents for a mortgage:

  • photocopy of passport or NIE (identification number of foreigners);
  • certificate of tax resident status;
  • labor contract;
  • the last three payrolls of the country of residence;
  • tax return for the last year;
  • bank statement with payments for the last year;
  • the last three receipts of outstanding debt;
  • registration of current assets (bank accounts, title deeds);
  • an extract from the Spanish Property Register (Nota Simple);
  • a contract of purchase and sale or a deposit agreement.

In addition, non-residents will be required to submit a credit risk report for a credit check.

All documentation must be translated by a sworn translator and paid for by the client.

Mortgage loans in Spain for Russians and foreigners

Mortgage rates in Spain

In recent years, banks have opted for a fixed interest rate.

Below are the most favorable mortgage rates in Spain from November 2021.

Open Fija by Openbank

The best fixed mortgage on the market is the Open Fija mortgage from Openbank, which has a fixed rate of 1.15% for up to 15 years and 1.35% for up to 30 years. To receive this percentage, you must register your salary and finalize a house insurance contract; if these requirements are not met, the applicable rate increases by 0.40%.

In addition, Openbank will reduce this percentage by 0.10% if the loan amount exceeds 150,000 euros.

This mortgage is intended for the acquisition of a first or second residence. It allows you to finance up to 80% of the purchase over 30 years (or up to 70% over 25 years for a second house). Openbank does not charge any fees for opening an account or partial early repayment.

Fixed mortgage COINC

The second place in the ranking goes to the fixed mortgage: COINC. The rate depends on the refund period:

  • 1.25% for 10 or 15 years;
  • 1.30% for 20 years;
  • 1.35% for 25 years;
  • 1.40% for 30 years.

There is the opportunity to not use additional bank products.

COINC can finance up to 80% of the house purchase (for example, 60% if it is a second residence) for a period of 3 to 30 years. The minimum loan amount is 30,000 euros, and the maximum is 800,000 euros.

Mortgage A Un Paso from Ibercaja

This mortgage offers a rate of 1.30% for up to 20 years in exchange for the owners’ wages domiciliation, totaling at least 2,500 euros per month.

The minimum amount is 200,000 euros, 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 total or partial early repayment.

The maximum mortgage in Spain for non-EU citizens is 60% of the housing cost, and a resident of the European Union can receive funding up to 70%.

Mortgage payments in Spain

According to the updated law “On Mortgage”, the client pays for the real estate appraisal and a copy of the contract, the bank covers the cost of other articles of mortgage registration. If you get an average mortgage loan of 150,000 euros, mortgage payments in Spain will only be 350 euros for a property appraisal and a copy of the contract, the cost of which depends on the number of pages but usually does not exceed 50 euros.

Thus, the cost of obtaining a mortgage will amount to approximately 400 euros, to which you will need to add a possible registration check. Payment for the rest of the items (notary, registration, administration and IAJD) will be carried out at the bank’s expense.

An example of calculating and paying off a mortgage:

Property price - 200,000 euros.

Initial payment - 30,000 euros.

Monthly fee - 588 euros.

Mortgage amount - 182 800 euros.

Total cost - 212,800 euros.

Taxes and expenses – 12, 800 euros.

Mortgage payments in other Spanish cities depend on the location of the house in Spain.

Mortgage loans for Russians and citizens of the CIS in Spain

To obtain a mortgage loan as a Russian citizen or a citizen of the CIS in Spain, you must prepare the following documents:

  • International passport and NIE.
  • Real estate reservation contract.
  • Income certificate.
  • Bank statement.
  • Certificate from the place of work.
  • Statement on the availability of the loan.
  • Proof of additional income.

Mortgage loans in Spain for Russians and foreigners

We will help you get a mortgage in Spain

Our company will help you organize a mortgage in Spain. You can find all the offers of real estate in Spain on Spain-Real.Estate. We guarantee comprehensive support throughout the mortgage registration process.

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