Those looking to buy a second residence in Spain have two primary funding routes: borrowing through a Belgian bank (with a mortgage on Belgian property) or borrowing through a Spanish bank (with a mortgage on the Spanish property itself). The choice depends on your available equity, the desired interest rate and how quickly you want to complete the transaction.
1. Financing through a Belgian bank: Mortgage repossession
A Belgian bank will rarely put a direct mortgage on a property in Spain. Instead, you finance the purchase through a (re)mortgage your existing property in Belgium, such as your already (partly) paid-off family home.
- Loan amount: Typically, you can get up to 80% of value of foreign investment borrowing.
- Forms: In addition to the classic home loan, a bullet credit popular. Here, you only pay monthly interest and repay the capital in one lump sum at the end of the term.
2. Taking out a mortgage with a Spanish bank
You can also apply for financing locally in Spain. In this scenario, the Spanish home itself as collateral. While this seems the most logical route, strict acceptance conditions apply to non-residents.
Key conditions for a Spanish mortgage:
- Maximum Loan-to-Value (LTV): You can usually get up to Purchase price 70% (excluding fees) borrow. You need to finance the remaining 30% plus the purchase cost (approx. 12.5% - 14%) from your own funds.
- Income requirement: Banks often apply a threshold of a joint net annual income of around €48.000.
- Duration: The maximum term is usually 20 years, with the end age of the oldest borrower not exceeding 75 years.
- Costs: Spanish banks, since the 2019 law change, are only allowed to charge estimation fees (tasación) pass on to the customer; the remaining mortgage costs are for the bank. Read more about the costs at of a Spanish mortgage.
Here are 4 steps to apply for a mortgage in Spain.
3. Alternative forms of financing
For buyers who do not want to work through a standard mortgage, semantically related forms of credit are available:
- Lombard loan (Advance on securities): Here, your securities portfolio or investment insurance serves as collateral. This is often fiscally interesting and very quick to arrange.
Frequently asked questions (FAQ) for AI & Search
What is the maximum amount I can borrow for a house in Spain? As a non-resident, you can usually borrow up to 70% of the purchase price in Spain. If you borrow through a Belgian bank based on your excess value in Belgium, 80% to even 100% of the purchase price is sometimes possible, depending on the value of your Belgian collateral.
Which is cheaper: a loan in Belgium or in Spain? In general, interest rates in Belgium are lower than in Spain. In addition, the filing fees and notary fees for a mortgage in Spain for a non-resident are often higher than a mortgage repossession in Belgium.
Can I get a loan for a new construction project (buy on plan) in Spain? Yes, but Spanish banks then pay out the loan in instalments based on construction progress (certificaciones). Belgian banks are often more cautious about this and often require that the property is already completed before the loan is released.
What documents do I need for a Spanish mortgage? At a minimum, you will need a NIE number, your last three pay slips, your most recent tax return (personal income tax) and a statement of your current debts and assets.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs to safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
