So you are not paying taxes in Spain but want to get a mortgage to buy a property in Madrid.
This can be an overwhelming when you do not know what the possibilities are, particularly as a foreigner.
Yes, you can get good mortgages from Spanish banks as a non-resident foreigner
And In fact, we recommend in most cases to do the 2 following things:
- ask your local bank with whom you have a long history. If you have properties in the country of your bank, better. Do not expect branches of your bank in Spain to help – they are different entities in most of cases.
- ask the leading spanish banks for mortgages to non-resident. The best are not the obvious ones by the way.
The first challenge: get the paperwork
First, it’s important for the bank to know about you. We always recommend providing as much information as possible but specifically, they need:
- Identification (Passport)
- Income: Demonstrate how much you earn – Tax Declarations from your contry where you pay taxes, pay slips.
- Assets: Facilitate proof of other properties, funds or stocks you own, via property deeds and bank certificates for instance
Any other financial information that shows that you are a financially sound candidate is helpful: Profit and Loss statements if you own a business, bank guarantees etc…
What is a good mortgage rate for a non-resident ?
As of 2016, the best rates you will get are :
- Variable rate: around 1.5% + Euribor (Euribor is the Central Bank of Europe Rate which is at just over 0% as of March 2016 – check here for updates) or
- Fixed rate: 2,7% fixed rate.
To get these top rates, you need two things however:
- Profile quality: demonstrate that you have a top quality profile with low risks. Specifically, banks look for high revenues.
- Commitment to the bank: contract other products to the bank, such as home insurance (which you will need anyway), ensure you send a minimum amount to this account monthly, that you pay your bills there etc…
Remember, usually rates for non-resident are significantly higher than the standard resident mortgages you might see around as you represent more of a risk, as you are abroad and less easy to embargo if anything happens from the point of view of the bank.
How much will they lend me ?
In general, to non-residents, you will get a maximum of 70% of the mortgage or property price financed by the bank. This means you need to put 30% down minimum. Many banks lend down 50% max which means you need to put the other half yourself.
How should I start ?
It is a complicated matter and if you want to make sure you get the best, we recommend you get in contact with us at email@example.com so we ensure you get the updated recommendations of the best banks and contacts who will attend you in English there. This way you will get the best rate in the end.
Why? because most banks don’t even answer to emails. In our test, of 10 emails sent in English on these complicated matters, 80% of bank contacts that do not manage your bank account will not answer.
And they usually do not know exactly how non-resident mortgages work in all offices.
Get in contact with your local bank to get a first anwer, and then send us an email so we can see what the best bank will be for you at firstname.lastname@example.org or at +34 911 980 685