Property News | Buying a property with a mortgage? Spain is your best option and here’s why

Being a property owner is a dream to many people. As an estate agent with many international clients, we see this every day, and we strive to find our clients the best properties in the area according to their preferences and requirements. But as an estate agent, we also act as middleman between vendors and buyers, negotiating every offer made on a property to try and get vendors and buyers the best deal possible. As part of the negotiation, sometimes there are other matters involved, such as bank valuations when the buyer needs a mortgage. And that’s what we’ll discuss today.

Although quite a few of our sales are to cash buyers, we do have clients that need to borrow money to be able to become property owners. It’s not always a full mortgage that buyers need, sometimes it’s just half of the selling price or even less, and in some cases it happens that buyers have the funds available but prefer to borrow money as they will need access to those funds in the foreseeable future or they have the money invested at a better interest rate. Whatever the scenario is, the fact is that if a mortgage is needed, then the offer made and the negotiation process will be different, as buyers will most likely need a bit more time to discuss a purchase price since more calculations are needed as a third party is involved. It is especially the case when a bank is involved, which is why we recommend working with mortgage brokers, as their response time tends to be shorter. In any case, needing a mortgage shouldn’t discourage you from following your dream of becoming a property owner. The truth is that getting a mortgage today is a good option, even more so to get it in Spain.

Now, if you’re wondering why Spain is a good option for a mortgage now, there are a couple of reasons. To start with, we’ve done some research on mortgage rates around the world and this is what we’ve found:

Country	Rate	Latest value available
Spain	2.13	December 2022
Germany	3.51	December 2022
Switzerland	3.07	December 2022
South Africa	10.50	November 2022
United Kingdom	3.91	December 2022
Netherlands	2.34	December 2022
Belgium	2.15	December 2022

 

From the list of all countries, we’ve picked the ones where we have more buyers from and where our clients tend to get more mortgages in, and we’ve found that Spain has the cheapest rate in the area to get a mortgage. There are some banks in Spain that offer an even better rate if the client is a tax resident here, it will depend on the specific case. We have also found that Spain is within the 5 cheapest countries to get a mortgage worldwide, so if costs are a dealbreaker for you, Spain is your best option.

Now if you’re in a position where you don’t need a mortgage because you have funds available to buy a property, you might also want to consider borrowing money. It’s not only mortgage rates that are good in Spain at the moment, but also interest rates on savings. As the bank pays you to have money accumulated in your account, the interest rate you have to pay on the mortgage may be offset. So basically, depending on the savings interest rate you can achieve, borrowing money could be costing you near to nothing should you keep the funds untouched, and the side benefit is that you have them available if you eventually need them.

Last but not least, another important aspect to consider Spain to get a mortgage is the maximum age. Although there is no maximum age determined by law, Mortgage Direct affirms that most banks will lend money to applicants that by the end of the repayment term are 75. In some rare cases, the age limit by the end of the term can be 80, but there are more requirements to be met and the term can be as short as 5 years. Of course this age limit is different for tax residents and non-residents, but the conditions offered are still good irrespective of where you pay tax.

So that’s an overview of the mortgage situation. Whether you need to borrow funds to be able to buy a property, or you are tempted to make the most of your money and borrow to keep your savings available, getting a mortgage in Spain will be your best option, and we recommend getting in touch with Mortgages Direct: they will be able to best advise you taking into consideration your needs and circumstances and they provide the best service in the area (our happy clients are proof of that!). Click here to get in touch with Simon, mortgage adviser, you will not regret it!

For Spain, Mortgages taken out in currencies other than the currency in which you earn are considered Foreign Currency Mortgages. Changes in the exchange rate may therefore increase the equivalent value of your debt. Under the Mortgage Law 5/2019 banks in Spain have introduced mechanisms to protect consumers from exchange-rate risk. For more information, please speak to your broker.

Mortgage Direct, S.L. is a company registered in the Registro de Intermediarios de Crédito Inmobiliario del BdE with the nº D108.