Mortgages in Spain for EU Buyers – 5 Things You Need to Know

1. Banks may finance part of the property purchase

For buyers living outside Spain, the loan-to-value ratio is usually lower than for Spanish residents purchasing their primary residence.

In practice, banks often finance around 60-70% of the property’s value, depending on the buyer’s financial profile, income, country of residence and the property valuation.

This means buyers should have sufficient funds not only for the portion of the purchase price that is not financed by the bank, but also for taxes and other acquisition costs.

2. The bank will carefully assess your borrowing capacity

When reviewing a mortgage application, banks typically look at:

• the level and stability of your income,
• your employment status or business activity,
• existing loans and other financial commitments,
• your assets,
• your country of tax residence,
• the currency in which your income is earned.

Banks will also consider the relationship between your monthly financial obligations and your net income. Each lender applies its own underwriting criteria, so final mortgage terms are assessed on an individual basis.

3. What documents will you need?

The exact documentation required may vary between banks, but non-resident applicants are commonly asked to provide:

• a passport or national ID card,
• an NIE – Número de Identidad de Extranjero,
• a tax residency certificate,
• an employment contract or documents relating to self-employment or business activity,
• recent payslips,
• the latest tax return,
• bank statements,
• details of existing loans and other liabilities,
• documents relating to the property being purchased.

Self-employed buyers and business owners may be asked to provide additional financial and tax documentation.

4. Earning income in a currency other than euros does not automatically prevent you from obtaining financing

Buyers from EU countries do not need to earn their income in euros in order to apply for a mortgage in Spain.

However, banks will take currency risk into account, as the mortgage will typically be granted in euros while the buyer’s income may be earned in another currency, such as Polish zloty.

For this reason, banks consider not only the amount of income, but also its currency, stability and the country in which it is earned.

5. It is worth checking your financing options before reserving a property

You do not need to wait until you have found a specific apartment or villa before checking whether you are likely to qualify for a mortgage.

Some Spanish banks allow international buyers to complete an initial mortgage assessment remotely.

This can help you determine in advance:

• your approximate property budget,
• the amount of equity you will need,
• an estimated monthly mortgage payment,
• the terms on which a bank may be willing to offer financing.

An initial assessment can be particularly useful before signing a contrato de arras and paying a substantial deposit.

Key points at a glance

EU buyers can obtain a mortgage in Spain even as non-residents.

In practice, it is worth keeping in mind that:

• banks may finance around 60-70% of the property’s value,
• lenders assess income, existing commitments and the buyer’s overall financial position,
• income earned outside Spain may be accepted,
• income in a currency other than the euro does not automatically exclude financing,
• it is advisable to assess mortgage eligibility before committing to a specific property.

Need financing for a property purchase in Spain?

At La Rosa Estate, we work with experienced mortgage advisors specializing in property financing in Spain.

We can help you assess your mortgage options, prepare the required documentation and guide you through the financing process step by step.

Sources

• Banco de España – Cliente Bancario
• Ley 5/2019, de 15 de marzo, reguladora de los contratos de crédito inmobiliario
• Your Europe – Mortgage loans and credit in the EU
• European Commission – Mortgage Credit Directive 2014/17/EU