To start with, where do you pay your taxes?
If you’ve not filed a tax return in Spain covering the last year (even if you’re already living there) you will be classed as a foreign tax resident.
Major Spanish banks like Santander or CaixaBank have separate packages for non-residents that come with significant differences.
Santander has a mortgage simulator for you to get an idea of costs.
Below, we will outline what Spanish mortgages for non-residents look like.
Mortgages for non-residents or foreigners: characteristics
The mortgage requirements for non-residents are more demanding than for Spanish citizens. This is because the bank needs to safeguard against non-payment on the part of a non-resident.
As Spanish mortgage expert Katherine Walkerdine explains, new laws mean that if currency rates go 20% against a client they have the right to change their mortgage into their income currency.
This, among other factors, means some Spanish banks will outright refuse to lend to non-residents.
The main characteristics of a non-resident mortgage in Spain are:
Shorter payment period, usually a maximum of 20 years
Whereas Spanish tax residents can borrow up to 80% of a property’s price, non residents can normally borrow up to 70%.
Some banks, like Caixabank, will offer up to 70% loan-to-value (LTV) for non-residents but only 50% for loans in excess of €1 million.
Some Spanish banks will only offer fixed-rate mortgages, often with higher interest rates. Santander’s mortgage package for non-residents allows discounted interest rates if you take out another Santander financial product, like life insurance, for example.
Similar to usual mortgages in Spain, the mortgage instalment together with other debts the applicant has, cannot exceed between 30% and 40% of the net income.
Many Spanish banks will require proof of income over a certain amount – BankInter, for example, requires income over GBP 40,000 for British clients, while CaixaBank requires a minimum of €45,000 or equivalent annual income.Mortgages for non-residents or foreigners: required documentation
A photocopy of passport and your NIE document, which is a tax identification number in Spain. You can apply for a * NIE at a Spanish embassy or consulate in your country of residence.
The certificate of being a non-resident in Spain.
A bank statement showing your paycheck and the last three paychecks deposited.
The certificate of fiscal (tax) residence and the fiscal declaration.
Documentation of the house being bought: deposit contract or purchase contract.
Credit risk report.All the documentation needs to be translated, but can be managed and processed via the Internet and phone. You will also have to open a bank account in Spain to facilitate the house purchase.
Bear in mind that you’ll likely need to pay for the services of a lawyer and a notary when negotiating a house purchase – agency fees can also be between 2-5% of a house price.
You will also need to officially translate any documentation into Spanish. This will include proof of your income and any other relevant documentation.
More information: Mortgages for non-residents in Spain
Read our Q&A here answering the question: Can foreigners buy a property in Barcelona? We also have a guide on getting a TIE card in Spain.
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