Mortgages for a property on the Costa del Sol

If you are considering buying a property in Andalusia, whether because you live and work here, have retired and wish to enjoy the sun or simply looking for an investment.it might be worth looking into what a Spanish bank can offer you. Whether it’s a villa in Mijas or maybe an apartment in Fuengirola, a mortgage may be your best option as few buyers have several hundred thousand euros sitting idle in a bank account.
 
Although interest rates vary in Southern Spain, they are generally far more competitive than northern Europe, and there is a lot of competition between Spanish banks. So it is worth shopping around to find the best offer.
 
First and foremost, you will need to find out how much they will be able to lend you. You are looking at your monthly mortgage equalling around 35% of the net income that the buyers generate. Example if you and your partner earn 2000 euros jointly, then the monthly mortgage repayments can be no higher than around 700 euros a month.
 
Next is the age of the buyers. This is to confirm the length of the mortgage. Unlike some banks in other countries, a 50 year old couple cannot get a 35 year mortgage. From experience the length of a mortgage assumes that the mortgage will go up to the buyers 70th birthday. So the 50 year old couple will get a 20 year mortgage in this example.
 
As a rule of thumb a bank will offer a resident an 80% mortgage whereas non-residents are offered 70%, although this varies from bank to bank. Some banks offer a maximum of 90% for non-residents.
 
Few banks offer 100%, as they wish to confirm that the buyers can afford the property. Unlike some countries, most Spanish banks are not interested in repossessing properties.
 
Please note, in most cases the 70/80% offered is based on the valuation of the property, not the price that you have offered on a property. So is you offer 190.000€ and the property is valued at 230.000€, a non-resident (70%) will get 161.000 euros mortgage and a resident (80%) will get 184.000€.
 
The bank will require proof that you can repay the mortgage, employee contract, wage slips, if self-employed copies of your accounts.
 
Any potential earnings on the property you wish to buy, say from renting a frontline golf apartment, will not be taken into account by Spanish banks.