Wondering how to go about buying a Spanish property financially? In this episode of "Confianz: After Hours", An-Sofie and Glenn discuss the different options for financing a second home in Spain.
Listen via Youtube, Spotify or Apple Podcasts.
They discuss the two main paths: borrowing in your home country (Belgium or the Netherlands) versus taking out a mortgage in Spain. What are the advantages and disadvantages? Which option best suits your situation? And, perhaps most importantly, what hidden costs and pitfalls should you absolutely avoid? An essential listening guide for anyone who wants to realise the Spanish dream realistically and well prepared.
In this episode, you will learn:
- Introduction: The Two Ways to Finance
- The crucial first step: a realistic analysis of your own assets and financial situation.
- The two main routes: finance through your bank in the Benelux or through a Spanish bank.
- How your personal situation (e.g. excess value on your current home) largely determines the choice.
- The home game: borrowing in Belgium and the Netherlands
- For Belgians: How to use your Belgian home as collateral for your Spanish purchase.
- The re-recording: a smart and cost-effective way to release capital from your existing loan without notary fees.
- Finance through your supplementary pension (group insurance, IPT, PSPS).
- For the Dutch: How to use the excess value of your Dutch home to take out a second mortgage.
- For Belgians: How to use your Belgian home as collateral for your Spanish purchase.
- The Spanish Route: The "Hipoteca" for Non-Residents
- Spain's tough, stricter rules for foreigners.
- The 70% (Loan-to-Value) rule: Why you can borrow up to 70% of home value as a non-resident.
- Own contribution: Expect at least 30% to 40% of the purchase price, plus additional costs.
- Shorter maturities (max 20-25 years) and a final age of 75 years.
- The danger of the assessed value (tasación): the bank lends based on the lowest value (purchase price or appraisal), which can crack your budget.
- Higher interest rates and the impact of additional products (insurance).
- The Third Way: private banking & Lombard Credit
- An exclusive option for high net worth individuals
- How to use your investment portfolio as collateral instead of the Spanish property.
- The benefits: up to 100% financing, more flexibility, higher speed and avoiding Spanish mortgage fees.
- The 3 Pitfalls You Absolutely Must Avoid
- The Budgeting Trap: Thinking 30% own cash will suffice. In practice, count on 40-50% cash.
- The Timing Valley Pit: Signing a purchase agreement with too short a deadline. A Spanish mortgage application takes 4 to 6+ weeks.
- The 'Do-it-yourself' Trap: The Spanish system is complex. Always engage a specialised, independent lawyer and financial adviser.
