Applying for a mortgage in Spain

Last updated on September 2nd, 2026 at 08:17 am.

Over the years, those looking for Spanish banks to finance their property purchase, have seen everything from mortgages being approved almost over the phone all the way up to a perfect financial situation being their requirement for approval. Where are we now if you need to borrow a little to make your dream come true?

• Applying for a mortgage can be a good financial decision that leaves you with some money in the bank for home improvements or unexpected expenses.
• Spain offers some competitive rates in comparison to other European countries.
• Be careful that you budget for other monthly and annual fees when buying your property.

If you bought a property in Spain towards the end of the 1990s or just after the millennium then you will no doubt have been surprised at how easy it was. There were very few checks completed and those that were, were in no way as robust as those in your native country. But this leniency when it came to mortgage loans wasn’t necessarily a good thing.

Bank checks and high expectations in terms of income are there to protect the lender as well as the bank. The result was that some property owners found themselves falling short when it came to paying their mortgage and with the 2008 bust of the property market, finding a seller if you could no longer pay was a challenge.

Now, house prices have risen and the financial outlook in Spain is good. Spain as an investment opportunity and as a place to buy a home for your own enjoyment, remains buoyant. So, what do you currently need to obtain a mortgage and what are the advantages of doing so?

The advantages of a mortgage

A mortgage enables you to secure a property that offers you everything you are looking for as well as not emptying your savings pot. It can mean that you are left in a position to do any restoration work or home improvements you want in one go without having to wait years as you improve your home gradually.

Nobody likes living in a builder’s yard and unless you have a DIY obsession it is unlikely that you want to turn your weeks of holiday into a Leroy Merlin manoeuvre. Reducing how much of your savings you put into the property and reserving money for making those changes that you want can work well for you.

If you apply for a mortgage on a property you wish to buy then the lending bank also has a vested interest in ensuring that the property is a financially secure asset. They will do their own valuation and some checks to verify its legality. Of course, you have to pay for these and they do not remove the need for you to also carry out your own independent legal and property checks. However, it is reassuring to know that someone else is making sure your property is worth investing in.

Obtaining a mortgage can also be beneficial when the currency exchange rate is low against the euro. You can also pay part or all of it off early if and when rates improve, and depending on the type of mortgage you obtain and how long you have had it for, there is usually little to no fee for doing so.

When it comes to tax, depending on your personal circumstances, the interest on your mortgage can be claimed as an expense, particularly if you are renting out your property.

Applying for a mortgage in Spain

Spain benefits from a wide choice of lenders and competitive rates in comparison with some other European countries and loans can cover up to 80% of the value of the property. For non-residents the amount of mortgage available will be less at around 60-70% of the value of the property.

Banks also take the applicant’s age into account when determining the mortgage term. The age limit and repayment period may vary depending on the bank and the applicant’s circumstances.

It is important that you ensure that you take into account other property monthly expenses when deciding how much you can afford mortgage-wise. Remember that you will need to pay property taxes (these vary depending on your status), home insurance, utilities bills and probably community fees. Build these into your budget before you apply. As a rule of thumb, and a calculation the lending banks will review, is that the new Spanish mortgage, when grouped together with any other mortgages or loans you may have, all together should not be more than 30% of your net monthly income.

You will need to decide what type of mortgage you wish to apply for.  As in most other European countries, you have a choice between a variable-rate, fixed-rate or mixed-rate mortgage. A variable-rate mortgage means that your monthly payment is dependent on the Euribor. Due to some uncertainty, fixed-rate and mixed-rate mortgages have been more popular with purchasers recently as they guarantee stable monthly payments. A mixed-rate mortgage means that you have a fixed-rate for a period of time such as 5 to 10 years.

Do remember to shop around. There are different rates and terms available and this is a long-term investment so be prepared to ask questions and take advice. Fixed rate may start higher now than the rate offered for a variable loan, it comes down to personal preference, if you prefer peace of mind, or a chance that repayments remain low.

Many banks will also tie your interest rate to certain other products held with the bank, offering lower interest if kept in place.  Some of these can make sense, such as home insurance or even life insurance, while other banks may include products which are more obscure, such as an alarm with their chosen provider.  Make sure you know if your mortgage has any of these bonifications to the interest rate, and the implications to your monthly repayments both with and without them.

The documents you need as a non-resident

• proof of income and employment e.g. work contracts and last three payslips
• income tax return from your home country
• bank statements that demonstrate proof of funds from the last twelve months
• a credit report from your country of residence
• Your NIE (Número de Identificación de Extranjero) which you must obtain before you purchase the property

The documents you need as a resident on a contract:

• employment contract and last three payslips
• latest IRPF/ income tax return
• updated vida laboral (employment history)
• evidence of any additional income

The documents you need as an autónomo in Spain:

• latest annual IRPF return
• quarterly IRPF payments
• annual IVA return and current-year quarterly IVA filings
• recent social security payment receipts

Whether you are a resident or a non-resident you will need to provide:

• DNI if you are Spanish or NIE + passport if you are a foreign resident
• recent bank statements (usually twelve months)
• documents relating to any existing personal loans or financial commitments

Of course, different lenders will vary and it is important to check out at an early stage exactly what you will need to provide. You don’t want the purchase process to be held up because you don’t have the correct information. Remember if you are transferring money from abroad it is also wise to make arrangements with a trusted and proven currency exchange service.

Buying a property, whether for yourself or investment, is an exciting opportunity. Paying for part of your property through a mortgage is one way of making sure you have sufficient resources for those extra little touches that can make your new home just what you’d always dreamt of.