Amount and duration of the mortgage.
The term of a Spanish Mortgage is maximum 25 years, in some cases 30 years where the mortgagee, should not exceed the maximum age of 70.
For example, someone who is 50 years will get a mortgage with a maximum maturity of 20 years which of course increases the monthly repayments.
This period may be extended when, for example, one of the children gets involved with the mortgage.
The maximum amount of the mortgage to be provided also dependents on several factors.
1. Own resources / maximum mortgage
For non-residents, the maximum mortgage is about 60-70% of the liquidation value, where the liquidation value is determined by an independent valuator appointed by the bank.
The liquidation value may differ from the agreed purchase price and in this case the lowest value is always taken for the calculation of the maximum mortgage.
The purchase costs , which are approximately 12-13% of the purchase price in Spain are never included in the financing.
For Spanish residents who live permanently in Spain there may be a higher ceiling on mortgage lending.
2. Your income
To meet the monthly interest and repayment obligations arising from obtaining a Spanish mortgage, you must demonstrate that there is sufficient income available each month. This income may come from permanent employment, pension or self-employment.
Regarding self-employment the banks have all kinds of requirements and needs, for example to submit annual reports audited by an accountant from several years.
No more than 35-40% of net income may be spend on mortgages and loans.
Acceptable proof of income sources include pay stubs, regular payment statements (including dividends, pensions, annuities, and alimony) and tax returns. Sometimes they also require a statement of the accountant or the home bank which proves that regular payments have been made into the account.
If you do not have any proof of regular income, you can borrow up to maximum 40% of the appraised value within certain limits.
NOTE: A regular income is even more important than having enough own resources.
3. Your current situation
Of great interest is your personal situation, family situation, number and age of children, present and future income, capital size , desires and expectations of further capital accumulation, (expected / required) withdrawals from the capital, your spending habits, age and the equity in your current home, etc.
Please note that in Spain the mortgage is attached to the house and not to the mortgagee. Mortgage Data are reported separately in the title deed.
