Spain Explained

Can I get a buy to sell mortgage in Spain?

Last updated on March 31st, 2020 at 10:18 am.

A buy to sell mortgage is a popular option for those looking to invest in property in the UK. 

These loans are issued to individuals who plan to purchase a property and sell it on soon after. Often, applicants will use the money to buy a home that needs some work at a bargain price. Subsequently, they’ll renovate the property and sell it on at a profit. Considering the state of the UK’s property market, this is an attractive option for investors. What’s more, with the Spanish property market on the up, many are looking to Spain to make savvy investments with a buy to sell mortgage. However, there is a hitch: unfortunately, buy to sell mortgages in Spain aren’t available. But don’t let this hinder your Spanish investment dreams – in this article, we run through your options.

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Alternatives to a buy to sell mortgage in Spain

Although seasoned renovators might be disheartened by the news that you can’t apply for a buy to sell mortgage in Spain, there are alternatives. The best way to find out what’s available is to consult with the bank with the help of your solicitor. Remember, it’s important to hire a firm with the appropriate language skills and local knowledge. However, a major upside is that whatever product you choose, a Spanish bank is likely to offer you a package with a far lower interest rate than their UK counterparts. In Spain, the following types of interest rates are available:

  • Fixed-rate
  • Variable-rate
  • A mix between fixed-rate and variable

If you use a Spanish mortgage lender, you should allow up to 10-15% of the total purchase value of the property for various transaction costs. In addition, you should know that you will only be able to ask for a mortgage on 60 % or 70 % of the property value. However, be sure to do your research, as different regions have different rates. Furthermore, due to attractive rates in Spain, buyers can be tempted to over-extend financially, so we recommend that your mortgage is aligned with your income to avoid defaulting on repayments. Therefore, before signing on the dotted line, ensure you have a thorough understanding of the following:

  • Amount to borrow
  • Your interest plan and whether the rate change with time or stay fixed
  • Home insurance and health insurance costs
  • Expenses of the application process
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Get the support you need to make a good investment

The key to getting the best possible deal is to ask as many questions as needed. You can make sure you cover all the details with the help of your solicitor. Your legal advisor and the bank will be able to guide you every step of the way, helping you with language and the legal landscape in Spain. With your solicitor’s support – and the right bank – you can make sure you understand all conditions of your mortgage to avoid surprises in the future. Although you can’t get a buy to sell mortgage in Spain you can find great deals that can help you invest in the lucrative Spanish property market.

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