¿What are the expenses of a mortgage in Spain?

If you are thinking of buying a house and you need to ask for financing, it is important that you start to do numbers carefully. To do this, you must take into account two main categories, beyond the price of the property you want to buy: the expenses of buying a home and the expenses of a mortgage.

 With the new mortgage law, the list of mortgage expenses is shared between the bank and the client, although not equally.

Both operations (the sale and the mortgage) have processing costs that can represent 12% of the value of the property you want to acquire, which will force you to carefully calculate how much you must have saved in order to buy a house. Keep in mind that, to that 12%, you will have to add 30% of the price of the house that the bank will not lend you, since banks only grant up to 70% of the purchase price in case of mortgages for non-residents in Spain (80% in the case of mortgages for residents). So if you are a non-resident in Spain you should have saved 30% of the purchase + 12% for costs.

The expenses of formalizing a mortgage

The expenses of formalizing a mortgage are those that are generated when you are going to take out one of these loans to finance the purchase of a home:

1. Valuation expenses

The Valuation is a procedure that allows the bank to know the value of a property and, based on that, calculate how much money  you may borrow. To be able to get a mortgage in Spain, it is mandatory according law to apply for one, but the client can choose the valuation company he wants to work with.

How much is the cost? There is no legal limit for appraisal expenses, although they usually range between 350€ for porperties around 200K€ and 1.800€ for a property with a value of 1.7M€.

2. Notary fees

The notary is in charge of giving public faith to the mortgage loan deeds and who grants them.

How much does it cost? Notary fees are established by the notarial fees. To understand how much would you would pay for a mortgage of 100K€, the notary fees would be around 650€.

3. Registration fees

The registration of the mortgage deed in the property registry is a mandatory procedure, among other things, so that you are considered the owner of the house you are going to buy.

How much does it cost? The registration fees for a mortgage are also set by law and, for example, for a 100K€ mortgage, the cost would be around 170€.

4. Management expenses

The administrative expenses are used to pay these professionals for procedures such as, for example, the settlement of taxes and registration of the property.

How much does it cost? The administrative expenses for a mortgage are not limited by law, but they usually range between 300€ and 900€.

5. Bank Costs

You'll also have to consider the costs for the bank arrangement fee, early repayment fees, home insurance or other related products that will depend on each particular case.