Mortgages in Spain for foreigners: conditions, rates and the down payment

Do foreigners get mortgages, and what resident status changes

Spanish banks lend to foreigners in two modes, and this is the first thing to understand about your own application.

• Resident - you live in Spain, you hold a residence permit, a Spanish employment contract or a business, and your taxes are paid here. To the bank you are almost a local client: financing of up to 80% of the value and standard rates are available.
• Non-resident - you are buying a home from abroad or do not yet hold residency. A loan is possible, but the bank prices in extra risk: financing is usually 60-70%, the term often up to 20-25 years, the rate slightly higher.

The key factor is not citizenship but the source and transparency of your income. A stable salary or business profit, backed by official documents and tax returns, counts for more than a passport. Income in a currency other than the euro will be recalculated by the bank with a buffer for exchange rate risk.

The one document nobody can do without is the NIE (the foreigner identification number). You need it both to open the account and to sign the deal.

How much banks finance and what down payment you need

The bank calculates the loan on the lower of two values: the purchase price or the appraised value (tasacion). The 2026 benchmarks look like this:

Do not forget the costs of the purchase itself: the ITP tax on a resale home or IVA with AJD on a new build, the notary, registration - depending on the region that is roughly another 10-15% on top of the price. So for a 200,000 euro property a non-resident should plan on around 80,000-100,000 euros of their own funds.

One more parameter is the debt burden: total loan payments should not exceed roughly 30-35% of net monthly income. It is this indicator that most often determines the approved amount.

Requirements and documents

The document package for a non-resident is bigger than for a local borrower, and almost everything from another country will need translating. The basic list:

• passport and NIE;
• proof of income: an employment contract and payslips for 3-6 months, or business accounts;
• the last year's tax return from your country of tax residence;
• account statements for 6-12 months;
• a credit report from your country of residence (the equivalent of a credit history);
• details of existing loans and assets;
• the preliminary contract or property reservation (contrato de arras), once the property is chosen.

The bank will accept documents not in Spanish with a translation; for completion at the notary the translations are done by sworn translators. Some banks ask for an apostille on certain certificates - agree the list in advance so you do not assemble the package twice.

Ley 5/2019: who pays what and how the law protects the borrower

Since June 2019 mortgage loans have been governed by Ley 5/2019 de contratos de credito inmobiliario. It rigidly allocated the costs of arranging a mortgage:

• The bank pays: the notarial mortgage deed, registration in the Registro de la Propiedad, the gestoria's processing services, and the IAJD tax (actos juridicos documentados on the mortgage loan).
• The client pays: the property valuation (tasacion, benchmark 300-600 euros with an accredited company) and, if they wish, their own copies of the deed.

The second line of protection is informational. At least 10 calendar days before signing, the bank must issue:

1. FEIN (Ficha Europea de Información Normalizada) - your personalised terms: the amount, the rate, the schedule, the total cost of the loan;
2. FiAE (Ficha de Advertencias Estandarizadas) - the standard risk warnings: indexes, early termination, cost allocation.

During this period you must visit the notary (the visit is free): they check that the bank issued the documents on time, answer your questions and execute a record confirming the terms have been explained to you. Without that record the deal will not be signed. The bank may not change the terms after issuing the FEIN.

Ley 5/2019 also capped early repayment fees: for a variable rate a maximum of 0.25% (the first 3 years) or 0.15% (the first 5 years); for a fixed rate up to 2% in the first 10 years and up to 1.5% after - and only where the bank has a proven loss.

The process step by step

1. NIE and a bank account. Not a single payment in the deal will go through without them. Benchmark: 1-2 weeks.
2. Pre-approval. You file the document package, the bank analyses your solvency and names the ceiling amount. Convenient to do before choosing the property.
3. Choosing the property and the arras. A reservation contract with a deposit (usually 10%) is signed. It is important to agree a period long enough for the mortgage approval, and a clause returning the deposit if the bank declines.
4. Tasacion. An accredited valuation company prepares the report; the final loan amount depends on it.
5. FEIN, FiAE and the 10 days. The bank issues the mandatory documents and you visit the notary for the explanations.
6. Signing. The sale and purchase and the mortgage deed are usually signed on the same day, the bank transfers the money to the seller, and then come registration and payment of the purchase taxes.

A realistic horizon for the whole process is 4-8 weeks after the documents are assembled; for non-residents sometimes longer because foreign certificates need verifying.

How Krepko does it for you

A mortgage for a foreigner means negotiations with several banks, document translations, control of the arras deadlines and the bundle of loan plus purchase plus taxes. Krepko runs the entire route within our Real estate practice:

• we assemble and translate the file to match specific banks' requirements;
• we request terms from several banks and compare the FEINs, not the advertised rates;
• we synchronise the mortgage timeline with the arras contract, the valuation and the notary;
• after completion we arrange the taxes, the accounts and the utility contracts.

Legally significant steps are performed by licensed specialists - lawyers, gestores, sworn translators. Planning a purchase with a mortgage - leave a request - the review is free, and we will assess your chances and budget before you put down a deposit.

Sources

• BOE: Ley 5/2019 reguladora de los contratos de credito inmobiliario
• Banco de España: Portal del Cliente Bancario (mortgage guide)