Mortgage in Spain: How to get the lowest rate for non-residents.

Mortgage in Spain for Non-Residents: How to Get the Lowest Rate?

Spain attracts many foreigners due to its mild climate, picturesque landscapes, and high living standards. One way to acquire property is through a mortgage, and despite the attractive conditions, the process of getting a mortgage for non-residents requires considering a number of particularities. In this article, we will look at how to obtain a mortgage with the lowest rate, as well as the factors to pay attention to when applying.

Main Features of Mortgages for Non-Residents

A mortgage in Spain for non-residents has several key differences from mortgages for local residents. It is important to understand these differences to avoid unpleasant surprises.

• Higher interest rates. Banks consider mortgages for non-residents as more risky. The average mortgage rate for non-residents is around 3.10%, while for residents it may be 2.50%.
• Limited financing amount. Banks usually provide a mortgage for 60-70% of the lower value between the appraisal and purchase price. In some cases, this may be limited to 50%.
• Repayment terms. Mortgages for non-residents often have shorter repayment terms, usually up to 20 years. However, exceptions are possible, and the loan can be granted for up to 30 years.
• Additional fees. The mortgage process involves additional costs, such as opening fees (0.5-1.5% of the loan amount).
• Borrower verification. Banks carefully check the financial stability of the borrower and may deny the loan if there are doubts about their solvency.

How to Get a Mortgage with the Lowest Rate?

To get a mortgage with the lowest rate, it is important to consider several factors that can influence the loan terms:

• High down payment. The larger your share in the deal, the better conditions the bank will offer. A larger down payment reduces the risks for the bank.
• Good credit history. Banks pay attention to your credit history, especially if you earn income in a stable currency (euro or currencies from EU countries).
• Stable income. Be sure to provide documents confirming your financial stability. Ideally, your income should be at least three times the monthly mortgage payment.
• Choosing the right bank. Some banks offer lower rates if you use additional financial products, such as insurance or opening additional accounts.

Documents Required to Apply for a Mortgage

When applying for a mortgage in Spain for non-residents, you must provide a number of documents that confirm your financial stability and the legality of your income.

• Foreign passport (original and copy).
• Non-resident certificate in Spain (Certificado de no residente en España).
• Proof of employment (employment contract, pay slips).
• Bank statement for the last 12 months.
• Tax return for the last year.
• Reservation agreement for the chosen property and the appraiser's report.

Which Banks Offer the Best Conditions for Non-Residents?

Several major banks in the market offer mortgage loans for non-residents with attractive conditions.

• Banco Sabadell: Fixed rate of 3.60%. Possibility to reduce the rate by 0.75% when using additional products.
• Unicaja: Mortgage loans for 60-70% of the property value with a fixed rate of 3.05% for the first six months.
• Bankinter: Offers both fixed and variable rates for non-residents with income in euros.
• Santander: Variable rate from 1.84%, loans from 100,000 to 1,000,000 euros.
• BBVA: Competitive rates with the possibility of reduction after the first year.

Additional Costs When Applying for a Mortgage

When applying for a mortgage to purchase property in Spain, it is important to consider not only the loan interest rate but also the additional costs, which may include:

• Mortgage opening fee (1-2% of the loan amount).
• Property valuation (around 300 euros).
• Property and life insurance (from 30 euros per month).
• Early repayment penalty (around 0.5% of the remaining amount).

Despite all the challenges, a mortgage in Spain can be a great option for acquiring property in this sunny country. The key is to choose the right bank, carefully study the terms, and gather all the necessary documents.