Ask a Question about Spanish Mortgages
If you have any queries about any aspect of Spanish Mortgages, you can contact us through our Contact Page or, If you prefer, post a question here for one of our brokers to answer.
14 Responses to “Ask a Question about Spanish Mortgages”
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By N2H
I have a mortgage on an apartment in Tenerife but want to buy another apartment. Can I get a mortgage on the second apartment?
Hi Matthew, in short – yes. You are able to raise a second mortgage in Spain on a second apartment. What most banks will do however, is lower the amount they are willing to lend you for the second purchase as they see this as an investment mortgage rather than a holiday home purchase.
There are some banks who will lend based on the overall loan to value of both properties though, so if the first mortgage is at a lower loan to value – yopu have paid a proportion of it off – then you can raise more on the second mortgage.
We have found a house we like and need to arrange a mortgage but our estate agent, (Name removed) has told us we must pay a reservation now or we will lose the property to someone else.
I am worried we might not get a mortgage or get a mortgage but not for enough money. The estate agent has said that they can definitely get us a mortgage though… I dont know whether to pay them or not.
Hello Paul and Jenny.
A common situation I´m afraid. No-one can guarantee a mortgage in Spain, not us, not an estate agent.
Any money you hand over to an estate agent is at risk if you do not have the mortgage arranged and an Agreement in Principle from the bank.
Do not rely on what an estate agent tells you. If they say they have your mortgage arranged ask them for written confirmation.
Our advice is always use a professional mortgage broker. We have no conflict of interest and will tell you what we really think about your chances of obtaining a mortgage in Spain.
Unfortunately many agents take their commission from the deposit – not from the final sale, so the pressure is on them to get the deposit at all costs. If this means bending the truth about the mortgage, then unfortunately there are companies here who will do that.
Best advice is to back off and secure the mortgage first. Better to lose that one property to anothetr buyer than to lose your deposit right?
Hi, I have a mortgage with (Name removed) Bank and the rate has been going up and up. Its now at 980 Euros a month, up from 620. I´d like to remortgage if I can to pay less per month. I asked my bank manager about this but he just doesnt seem interested.
Should my rate have gone up this much and do my bank have to speak to me and offer me a better deal?
Hi Julie.
The most likely reason for your rate going up is that the Euribor has risen a lot over the past few years and most mortgages in Spain are linked to the Euribor.
It is not uncommon for the bank to not want to help – if they lower your rate, they make less money.
however there is a way to force their hand and make them lower your rate or lose you as a customer.
It is called subrogation and is a way of remortgaging to another bank with low costs. (More info about subrogating your mortgage / remortgaging in Spain).
If we can find another bank who will give you better terms and conditions than your current bank then your current bank have to make the decision to either MATCH those terms and conditions or lose you as a client to the new bank.
So, win-win for you!
If you want to know if we can do this for you, email us at info@tenerifemortgagebroker.com or fill in our short contact form on our contact page.
Hi, glad I found this site.
I am looking at buying a business in Tenerife in the next 12 months or so and moving out permanently. I visit two or three times a year.
If I buy a small business there will I then be able to get a mortgage to buy a studio or 1 bed apartment?. My budget will be about 100,000 Euros for the apartment with a 80,000 Euro mortgage. I am looking at businesses on a few websites for about 50,000 Euros cash.
That will leave me with about 50,000 Euros in the bank.
Hope you can help.
Hello Paul,
I´ll post a quick reply here but I have also emailed you with a more detailed response.
As I understand you have about 120,000 Euros. You wish to purchase a business for 50,000 Euros cash. You then wish to purchase a studio or apartment for 100,000 Euros, 80,000 mortgage and 20,000 cash, leaving you with 50,000 cash in the bank.
Firstly, once you are resident in Tenerife and a business owner you will be self employed (autonomo) or a director of a company (an SL).
Banks in Tenerife and Banks in Spain generally, will not consider you for a mortgage until you have a minimum of 1 years full accounts. Even with a years accounts, most will not be too keen to lend. Generally two to three years solid accounts is required for the mortgage application.
Secondly, you also need to budget for the purchase and mortgage costs. For a 100,000 Euro property, you will need to pay approximately 10,000 to 12,000 Euros in addition to cover taxes and legal/bank fees.
You could apply for a Spanish mortgage now whilst still resident in the UK with your UK income. The problem here is you must be sure you are going to be able to makle the payments once you have moved over here – especially as you plan on running your own business. You would need to be sure the business you are buying has absolutely solid income.
Check your email anyway and let me know if we can be of further assistance.
We are looking at some properties in Tenerife and plan on getting a mortgage from a Spanish bank. We are interested in what the best rates are at the moment and how much we can borrow.
Also, do you recommend using a lawyer in Tenerife? If so, which one? We spoke to two estate agents here who both said we didnt need one as they do all the checks for us.
Hi Mike,
It is difficult to say what the best rates are without knowing your circumstances I´m afraid. If you are resident in Tenerife we have rates from Euribor plus 0.19%.
For non-residents, rates start at Euribor plus 0.29% (special circumstances apply). A standard non-resident rate is Euribor plus 1% but we can often beat this by shopping around but again – it really depends upon your circumstances.
So far as borrowing, we can offer upto 90% of the purchase price. Again, this is not available for everyone but it is currently the best offer on the market.
I always recommend using a lawyer / conveyancer when purchasing a property. the cost is low in comparison to how much one canl ose should things niot be as they appear. Plus, if you have a complaint later about any aspect of the purchase, you can take it up with your independent lawyer who should be able to resolve any problems for you.
We have negotiated special terms with a number of lawyers in Tenerife. We also oversee the whole process ourselves giving you another independent viewpoint and ensuring you are not taken advantage off in any way by anyone else involved in the buying process be it an estate agent, developer or private seller.
Hello, can you tell me about “taking over a mortgage”? I viewed a property which the owner says comes with a Spanish mortgage already.
What does this mean for me? Is it cheaper?
Hello Derek,
Taking over a Spanish mortgage is called “subrogacion” and is most common when you purchase from a developer.
the existing mortgage is transferred into your name.
the advantages are that it is cheaper than setting up a new mortgage INITIALLY!!!
However, if the terms of the mortgage are not competitive – poor interest rate for example then it may cost you a lot more money in the long term than if you shopped around.
the other point about subrogacion is that you have to qualify for that specific banks lending criteria, if you do not, then you need to go to another bank for a mortgage.
So, subrogacion, or “taking over a Spanish mortgage” can be a good thing in certain circumstances.
We offer a free analysis of any subrogacion deal and can tell you relatively quickly whether the mortgage is competitive or whether you would be best shopping around – contact us for further information.
Hi, we are looking at buying somewhere in Spain, possibly tenerife in January.
Do we have to use a Spanish bank or can we get a Spanish mortgage from a bank in England?
Banks and Building societies in the UK will currently not use a property in Spain as security for a purchase mortgage.
There is one building society who will offer a Lifetime Loan type of mortgage agaisnt Spanish properties but these are not for the purposes of property purchase. They are a special type of Spanish equity release mortgage.
Many of the banks in the UK now operate in Spain although they are separate entities. Barclays, Halifax and Lloyds are the most prominent.
There are also a number of banks operating in Gibraltar, sometimes referred to as “offshore lenders” who offer mortgages in Spain to non-residents.
We work with them all so let us know your requirements and we will be pleased to help.