Many people think that buying a property in Spain is only possible if you have a large amount of savings.

But how much do you actually need?

In this article, we clearly explain how much you can borrow, how much own capital is required, and what you need to take into account when buying a property on the Costa Blanca South.

Is a mortgage in Spain possible?

Yes, in many cases it is possible for foreign buyers to obtain a mortgage in Spain.

Spanish banks regularly offer mortgages to non-residents, although the conditions are different from those in the Netherlands or Belgium.

How much can you borrow in Spain?

For buyers who do not officially live in Spain (non-residents), Spanish banks generally finance up to 60% to 70% of the valuation or purchase price of the property. The bank will always use the lower of these two values.

This means that buyers usually need to contribute at least 30% of the purchase price themselves. In addition, the additional purchase costs must also be paid from own funds.

In practice, this often means that you need approximately 40% to 45% own capital to buy a property in Spain.

Important to know

Many buyers underestimate how much own capital is required.

Would you like to know what may be possible in your situation? We are happy to review this with you, without obligation, and give you a realistic indication based on your income and wishes.

Important mortgage conditions in Spain

Maximum monthly expenses

Spanish banks generally apply a maximum ratio between income and fixed financial commitments. In most cases, total monthly obligations may not exceed approximately 35% of net income.

This includes, for example, existing mortgages, personal loans, alimony obligations and the new Spanish mortgage.

Future rental income is usually not taken into account during the assessment.

Mortgage type

The most common mortgage type in Spain is the repayment mortgage on an annuity basis.

This means that you pay a fixed monthly amount consisting of interest and repayment. As the term progresses, a larger part of the monthly payment consists of repayment and a smaller part of interest.

At the end of the term, the mortgage is fully repaid.

Term and age limit

The maximum mortgage term in Spain is usually between 25 and 30 years.

In addition, banks apply a maximum age at the end of the mortgage term. In most cases, the mortgage must be fully repaid before approximately the age of 75.

If a buyer is older, this may result in a shorter term and therefore higher monthly payments.

Property valuation

When applying for a mortgage, the property is always valued by an approved surveyor. In Spanish, this is called a tasación.

The bank then determines the maximum mortgage amount based on this valuation.

If the valuation is lower than the purchase price, the amount of own capital required may be higher.

Important difference compared with the Netherlands or Belgium

In Spain, a financing clause is usually not accepted in reservation contracts.

This means that buyers often sign a reservation agreement and pay a deposit before the mortgage is fully approved.

That is why it is wise to have a clear picture in advance of your budget, financing options and the amount of own capital required.

How much own capital do you need?

To give a clear idea of the total investment, we use a property of 300,000 euros in the province of Alicante as an example.

Example 1: purchase of a resale property

When buying a resale property, the buyer pays transfer tax. In Spanish, this tax is called Impuesto sobre Transmisiones Patrimoniales (ITP).

In the Valencia region, this tax is generally 10% of the purchase price.

Estimated costs:

Transfer tax (ITP): 30,000 euros
Notary: approximately 600 to 900 euros
Land Registry: approximately 300 to 600 euros
Lawyer: approximately 1,500 to 3,000 euros
Other costs: approximately 300 to 600 euros

Total additional purchase costs generally range between 33,000 and 35,000 euros.

This brings the total investment to approximately 333,000 to 335,000 euros.

Example 2: purchase of a new-build property

Different taxes apply when buying a new-build property.

The buyer pays VAT (IVA) of 10% and stamp duty (AJD) of approximately 1.2%.

Estimated costs:

VAT (IVA): 30,000 euros
Stamp duty (AJD): approximately 3,600 euros
Notary, Land Registry and lawyer

Total additional purchase costs generally range between 36,000 and 38,000 euros.

This brings the total investment to approximately 336,000 to 338,000 euros.

Summary

For most buyers, a mortgage of up to approximately 70% of the property value is possible.

In practice, this means that approximately 40% to 45% own capital is required.

Good preparation is essential to avoid unpleasant surprises.

Considering buying a property on the Costa Blanca South?

We guide you step by step through the buying process and help you gain a clear understanding of your financing options.

Personal advice?

Would you like to know how much you can borrow and how much own capital you need for a property on the Costa Blanca South?

We are happy to review your situation with you, without obligation, and provide a realistic and clear overview based on your wishes and financial possibilities.

Please feel free to contact us for personal advice or view our current property listings.