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Mortgage in Spain

Mortgage in Spain, many of us are interested in a mortgage on a holiday home in Spain.

Getting a mortgage and buying a property in Spain is proving more popular than ever, thanks to the urge to escape to the sun and the arrival of low-cost, no-frills airlines.

Now is a good time to buy in Spain as European interest rates are low and there is a wide selection of properties available, from apartments on developed plots, farmhouse (fincas) and village locations, through to villas and townhouses.

A lot Spanish property is bought off-plan, with a mortgage where you can put down a deposit on an incomplete home in a new development. Many of these provide common areas such as gardens, swimming pools, tennis courts and gyms, all for an annual fee.

Getting a mortgage in Spain

If you don’t have the cash, there are two ways to pay for your foreign home. You can extend your main mortgage or you can get a new mortgage for the property. Extending your mortgage is currently a cheap way of borrowing the extra cash you need. The other option is to take out a second mortgage on your holiday home.

Arranging a mortgage in Spain doesn’t necessarily mean dealing in a foreign currency. Abbey and Barclays, for example, offer buyers the opportunity to deal in euros or sterling. If you’re buying a property in Spain to let out, you’ll receive rent in euros so it makes sense to take the mortgage out in euros so you can offset the rent against repayments.

If you are not letting the house, but your main income is in euros, again it makes sense to take out a euro mortgage. But if you earn in sterling, a sterling mortgage is usually your best bet, otherwise you need to worry about the exchange rate. Whatever currency you opt for, the mortgage will be run in the same way

Choice of lenders for a mortgage in Spain

In Spain, you’ll have a choice of lenders - both native mortgage companies and a handful of UK lenders. Many Spanish banks, such as Solbank, are keen for mortgage business with foreign customers. They have branches along the coast with English-speaking personnel who will be willing to help you through the whole process.

Several UK lenders also have operations based in Spain. These include: Abbey, Barclays, Banco Halifax Hispania, Leeds & Holbeck BS, Newcastle BS, Norwich & Peterborough BS and Royal Bank of Scotland International. These are all effectively Spanish operations, but usually have English speakers who can offer advice