Repayment mortgages
The repayment mortgage is the most common type of mortgage. The periodical (typically
monthly) repayment quotas include capital repayments and interest and are fixed
on a periodical basis. Spanish banks offer a repayment period of up to 30 years,
depending on the age of the applicant. Most banks require that the mortgage be paid
off in full by the age of 70. Older applicants can avoid this by including their
children on the mortgage deed either as applicants or guarantors. The loan amount
can be to a maximum of 80% of the value of the property.
Click here
to apply for a Repayment mortgage in Spain.
Interest only mortgages
A type of mortgage product where you only pay interest during a fixed period of
5-10 years. Thereafter the repayments revert to capital and interest. The amount
that may be borrowed can be up to 70% of the value of the property.
This product is attractive especially for property investors who
plan to sell the property before the end of the loan period, thus keeping monthly
payments as low as possible.
Click here to apply for an Interest only
Spanish mortgage
Low start mortgages
Similar to the repayment mortgage
but the monthly repayments (capital and interest) increase by 2% annually. The repayment
quotas are low during the first years of the mortgage and high during the last years.
The terms and conditions of this product make it suitable especially for young people
who expect their incomes to rise by at least 2% annually. It is also an alternative
product to the interest only mortgage, it has higher repayment quotas but the terms
and conditions for this product are more favorable. The amount that may be borrowed
is up to 80% of the value of the property.
Click here to apply for a Low start mortgage in Spain
Construction/Self build
Do you want to build your own home? No problem! Once land is acquired, we can arrange
stage payments. Payments can also be interest only if required.
Click here to apply for a Self build mortgage
Equity releases
Non status mortgage
If you can’t provide proof
of income to support your Spanish mortgage application you can still get a mortgage. The
amount that may be borrowed can’t exceed 120,000 euros or 50% of the value of the
property.
Click here to apply for a Non status mortgage in Spain
General information: Variable rate loans - Both variable and fixed rate mortgages
are available.In practice the vast majority of mortgages (over 95%) are with variable
interest rates as they tend to be about 3 percentage points cheaper than the ones
with fixed interest rates. The reason for this is that banks are no risk takers
and charge a very high risk premium for providing the mortgage taker with the security
and comfort to have fixed repayments. However, as it is advantageous to have a fixed
rate loan when the interest rates rise sharply, it’s a disadvantage when the interest
rates move in the opposite direction. If you want to cancel the loan the commissions
to do so (3-4%) are many times higher than the commissions to cancel variable rate
loans (0,50-1%). The interest rate on the variable rate loans is based on EURIBOR
(Euro Inter Bank Offered Rate), the interbank lending rate in Spain . The bank adds
on a margin on top of that and the size of this margin naturally depends on the
customer profile. A mortgage application that seems very attractive to one
bank can be “penalized” with a high interest rate by another bank with another risk
policy.
Let us help you with your mortgage in Spain.