The first important thing you should know is that Mortgages in Spain are regulated under the Law LCCI 5/2019. 

Getting a Mortgage in Spain is a long process that requires effort and dedication. Taking the time to gather information and carefully study the options and possibilities is essential to get the best financing. That's why we, Mortgage in Spain.es, aim to clarify each step, so that you can enjoy your new home a little more easily as soon as possible.

As buyers you should think about which mortgage loan best suits your needs: whether you will be able to meet the regular payments, the repayment term, see what your savings are and add some margins for unforeseen expenses. It is advisable to know your debt ratio and that should not exceed 30-35% of your net income.

Regarding the repayment period, if we are talking about non-residents, the maximum is usually 20-25 years, being higher in the case of residents in Spanish territory (the maximum is usually 30 years).

Finally, the main requirements that are asked to grant a mortgage in Spain have to do with the economic solvency of the client, although they are not the only ones: having a regular income; Economic stability is key for any mortgage concession. The bank will ask for payslips and working history in order to know better where and how the income flows.

Fixed-rate: For fixed-rate mortgage loans, the monthly instalment to be paid and the interest rate applied will not vary during the lifetime of the loan. Even if market interest rates go up or down you will paying the same every month.

Variable rate: In the case of variable rate mortgage loans, the most common is that the interest rate is linked to a reference index (the most common is the Euribor). In this way, the monthly payment will vary according to the Euribor.

Mixed rate: These mortgages apply a fixed rate during the first years of the loan and then apply a variable interest rate with reference to the Euribor.

Another very important aspect of a mortgage loan selection process is the associated fees. In addition to having to make a monthly payment for a period that generally ranges from 20 to 30 years, depending on the bank with which we contract the mortgage loan, we will have to pay certain fees or others. Here are some of the most common ones:

Arrangement fees: this is calculated on the total amount of the mortgage loan. This fee is paid at the start of the mortgage loan as compensation to the bank for the formalities and procedures involved in taking out the loan.

Early repayment commission: this takes place when the customer pays in advance all or part of the capital pending repayment. It is compensation to the bank for the administrative procedures that the bank has to carry out, as well as for what it does not receive in interest on the capital that remains to be repaid.

Appraisal of the property: The mortgage law establishes the obligation to carry out an appraisal of the property to be purchased, and it is also an expense that must be paid by the buyer. The cost will depend on the type of property and its appraisal value, being, as a guideline, around €350 for a property of €200,000. 

The client may have the appraisal carried out directly by the bank or apply forit on their own, being the only requirement that it is carried out for mortgage purposes and in compliance with the ECO/805/2003 order. 

Non-residents we'll need at least a 30% of the purchase price or appraisal price of the property (the lower of the two). In addition clients have to pay the related costs of purchase, which in average are a 12% depending on the type of property and location. This is what is known as a "down payment".

Here you are a breakdown of the related costs to the purchase of a property in Spain:

• Spanish Taxes: Up to a 10% depending on the type of building and location of the property.
• Notary + Land Registry + Processing Costs.
• Appraisal of the Property.
• Bank Arrangement Fee.
• Home & Life Insurance.

It will normally take around 6 to 8 weeks. This period counts from the date you have provided all the necessary documents until you sign your purchase and mortgage loan at the notary office (including the cooling-off period). 

The most common documents you need to apply for a Mortgage in Spain if you are a non resident are:

• Copy of passport.
• Work contract + 6 last payslips obtained. 
• Bank statement last 6 months from the account where the salary/income is paid in.
• Bank statement from the savings account showing the funds needed to complete the purchase.
• Tax report 2 last years.
• Credit Report
• Last 3 receipts for outstanding debts.
• Reservation Contract for the property to purchase.

You will also need a NIE number (fiscal number in Spain) to complete the purchase, you should apply for this as soon as possible: NIE numbers are issued by the National Police of Spain (same authority that issues Spanish passports and ID cards). You can apply for a NIE number in person, at the Consulate of Spain in your country.