Few Poles know that Spanish banks also extend credit for the purchase of property in Spain to foreigners. How much of a down-payment do I need and what are the formalities when applying for a loan?
- What kind of loan to buy a house in Spain?
Let’s start by explaining the basics:
- Poles can get a loan to buy a house in Spain from a Spanish bank,
- It’s all about the mortgage, which has extremely favorable interest rates in Spain.
- In October 2023, the average mortgage interest rate in Spain was 3.71 percent, while in Poland it was 5.68 percent (sources: ECB and European Commission).
With a steady income and a good credit history, many Poles are gaining a reputation as good customers in the eyes of Spanish institutions. Poles, on the other hand, are positively surprised by the prices of houses and apartments in the country.
- How much equity to take out a loan for an apartment or house in Spain?
- You can find different information on the Internet, but from our practice, foreigners can count on a mortgage of 50-70 percent. values real estate. Note: 10 percent must be added to this. the own contribution that banks require to cover “around-the-credit” costs, such as a visit to the notary, tax or registration in the real estate registry. – explains Alan Narkiewicz, director of Get settled on the Costa Blanca. Spanish banks extend credit to foreigners for up to 20 years.
EXAMPLE
A 50-square-meter apartment in Girona costs 150,000. euros.
Successfully obtained a mortgage for 60 percent. The value of the property.
Thus, 40 percent is needed. + 10%. For additional costs.
The total is 75,000. Euros – approx. 335,000. PLN.
What about the installment?
Assuming an interest rate of approx. 3 percent. annually:
For a 10-year loan, this would be approx. 3650 PLN per month
For a 20-year loan, this would be approx. 2200 PLN per month
(calculations for. Interest rates are only estimates. Please contact us for ustalation of the real interest rate based on the actual price of the property, the interest rate and the term of the loan).
- Spain home loan step by step .
The procedure begins with the collection of documents needed to determine creditworthiness. Everything can be sent to us by mail or email. The investor will then receive a mortgage simulation from us and information on what financing he can count on. We sign a preliminary agreement and the actual loan procedure begins, which can take time ca. 1-2 months. At this time, the bank is ordering, among other things. Preparation of a real estate appraisal. If everything goes well, a mortgage contract is signed for a property in Spain. You will also usually need to purchase life insurance from an institution that works with the bank in question. Most of these steps can be taken care of remotely by having an agency employee act as a proxy. In fact, only one personal visit to the bank is needed – to open an account.
- Documents needed for a home loan in Spain
Evaluating each case individually, the bank may ask for additional documents, but the following always appear:
- identity card or passport
- extract from the database of the Credit Information Bureau
- extract from the land registers, if the Investor already owns some real estate
- PIT from the last two years and an extract from the CEIDG register in the case of entrepreneurs
To be able to start the loan procedure, you need to sign a preliminary agreement for the purchase of the property, although in practice it is often signed in parallel with the documents from the bank.
To buy a house in Spain on credit, you also need to get a Spanish NIE number.
| NIE is the Spanish equivalent of the NIP given to foreigners. Its issuance to a citizen of an EU country takes several weeks. To do this, you need to go to the police station. |
- Additional questions about an apartment/home loan in Spain
Will a Polish bank give a loan for an apartment in Spain?
Unfortunately, for the time being it is not possible to take a mortgage to buy an apartment in Spain in a Polish bank.
At which bank in Spain can you get a loan?
As an Agency, based on our years of experience, we are working with one of the large Spanish banks, which we believe offers the best service to foreigners and the lowest loan rates. Upon request, we can also act as an intermediary for any other Spanish financial institution. Feel free to contact us to discuss the details.
Who handles the paperwork for a loan to buy a house in Spain?
Another misunderstanding concerns the paperwork for a loan to buy a house in Spain. Our clients are concerned that they will have to navigate the law themselves and go to meetings at banks. Nothing could be further from the truth! Most of this paperwork can be on our side.We work with lawyers and certified translators. We are fluent in Spanish ourselves. It costs 1500 euros for us to carry out the full credit procedure .
( does not include amounts needed to complete thetranslation oftax documents )
Can a home loan in Spain be paid off early?
Yes. At the bank we work with most often, the commission is 0.25 percent. value of the property in case of early repayment within the first three years of taking the loan and 0 percent. afterwards. Each bank has slightly different rules , but it is usually possible.
Do documents need to be translated?
Documents in English and account statements do not need to be translated. A PIT or an extract from the land register needs to be translated with a certified translator.
Can everyone count on a home loan in Spain?
No, although in our Agency the success rate reaches 100 percent. That’s because we make an application based on an initial conversation and will first assess the situation ourselves. Customers who have the right down-payment, collect all the documents and have no negative credit history usually get a loan through us. Feel free to contact us to discuss the details.
