Mortgages in Spain


According to government estimates, around 1.8 million Britons live in Europe, with Spain boasting an expat population of just over 1 million UK citizens. And the region of Andalucia, where Malaga, Marbella and Torremolinos are located, is one of the most popular areas for those making the move.

After a turbulent few years in the eye of the euro zone storm, Spain appears to be making a turnaround at last. The economy is showing signs of recovery, tourist numbers are up, and after years of plummeting house prices, experts are predicting increases in 2015, with the cost of property in some areas rising already. Bargain prices and the opportunity to negotiate these down even further with some very motivated sellers mean that it’s most certainly a buyer’s market. This together with historically low interest rates and the growing strength of the pound is making it much more affordable to buy there, and signs that the market is improving are starting to lift the confidence of prospective buyers.

The British are still the biggest group of foreign buyers but they no longer dominate as they did in the boom, according to Spanish Property Insight. The market today is much more diversified, which is positive news. And the growing presence of US, Russian and Chinese buyers is a sign that the Golden Investment Visa initiative, which was introduced in September 2013 and offers residency permits to non-EU nationals in return for an investment of €500,000 or more in Spanish property, may be starting to have an effect. Mortgage availability is generally good, despite the recent doom and gloom, and financial institutions still have a healthy appetite for lending, with maximum loan to values still around 65% and rates from 3.35%. For many people buying property in Spain, it’s a lifestyle choice, and they’re attracted by the climate, amenities and culture, rather than earning a prospective fortune on their home there. If people enjoy what Spain has to offer, property can be snapped up there on better terms than have been seen for years.

As always, it’s imperative to take professional advice before making any decisions. Prospective buyers should always go through the same process that they would follow if they were buying a property in the UK, and this includes consulting a good independent lawyer, and ensuring that an independent valuation of the property takes place, even if it’s a cash purchase. There’s nothing to be gained, and everything to lose, by cutting corners and taking unnecessary risks.

One of the most effective ways of obtaining a mortgage for a property purchase in Spain is to use a specialist broker in the UK. They’ll know the exact mortgage application requirements and can source the best possible deal. It can also put buyers in touch with specialists in Spain, to ensure that they comply fully with planning and legal conditions, and can also assist with currency exchange.