Bank Loans in Spain

We often receive questions about the possibility of getting a mortgage for a new property in Spain.

Documents Required When Applying for a Loan in a Spanish Bank

These documents are required by the bank, not by us. However, we help you establish contact with the right bank representative.

Tax return from the most recent tax year, including full tax information showing total gross income and final tax, so the bank can determine your net income.

The last 2–3 payslips (or pension statements), as well as an employment certificate stating the type of employment contract you have.

Copy of ID document.

UC credit report: credit information regarding debts in Sweden and any payment remarks. The Swedish credit agency (UC) provides valuable information for banks, including property tax values, recent tax returns, etc.

Bank assets: an overview of your account balances, including current accounts, savings accounts, mutual funds, share portfolios, etc. This is especially important if you are applying for a large loan but have significant savings or investments that you do not want to use. Usually, copies of bank statements from the last three months are sufficient.

Debts: information about outstanding debts in Sweden and how much you pay in interest and amortization per month.

Housing: banks want to know whether you rent or own your current home (and if you own, a valuation of the property), the cost of your housing, and any loans connected to it.

How Much Can You Borrow?

Normally, you can borrow 60–70% of the purchase price. Please note that you cannot borrow money to cover taxes and fees. This means you need to pay approximately 30–40% of the total amount as your own capital. How much you can borrow depends largely on the type of property you are buying and where it is located.

The repayment period is usually around 20 years for foreign buyers. Some banks have an age limit of 67 years for a mortgage, while others are more flexible. Many banks today have increased the age limit to 75 years.

If You Are Self-Employed

In this case, the banks will require tax returns and financial statements (profit and loss statement and balance sheet) so they can assess your income. Preferably, they want accounting records and tax returns from the last two years.
Spanish banks, just like Swedish banks, require comprehensive documentation to understand your net income (after tax and fixed expenses in your home country) and thereby determine your repayment capacity for a loan in Spain.
It is not a problem to borrow money from a Spanish bank using a Swedish company. It is very common for Swedish limited companies (and other company types) to take loans in Spain. However, you can usually borrow a maximum of 50% of the property value if the loan is taken through a company. Companies also usually have shorter repayment periods.

Mortgage in Spain or Another Country

Mortgage interest rates in Spain are higher for buyers who are not tax residents in Spain compared to those who are residents. If you are a tax resident in Spain, you can typically get a mortgage with an interest rate of Euribor + 1.00–1.50%. If you are not a tax resident in Spain, the interest rate is usually Euribor + 2.50–3.50%.

With this in mind, if you are considering taking a loan to buy a property in Spain, it is likely that a bank in your home country may offer a better interest rate than a Spanish bank. We therefore recommend that you ask which banks in your home country approve mortgages for properties in Spain.

You should also be aware that most Spanish banks offer additional products in connection with variable-rate mortgages, which can help lower the interest rate. These may include monthly transfers to maintain a certain account balance, using a credit card for a minimum amount, taking out insurance policies, and similar requirements.

Starting the Bank Application Process

If you have already decided which bank you want to borrow from, we recommend that you apply for a loan quote before submitting all the required documents. This means you first submit a complete overview of your income, loans, employment situation, and the loan amount you need. The bank will register this information and inform you whether they can approve a loan based on these details.

This can save you both time and money, as you do not need to submit all documentation immediately if the bank does not approve your loan application.

The bank will also require a so-called nota simple, a certificate from the property register regarding the property you want to buy. If the bank reviews your financial information and determines that you cannot get a loan, you can always apply with another bank. If the bank confirms that you can get a loan based on the information provided, you must then submit all documentation that proves the information, and a property valuation will be ordered.