Blanca International: How to get a 100% mortgage in Spain?

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“How do I get a 100% Spanish mortgage” – we are used to this question.

As the leading real estate agency in Javea and the surrounding area of ​​the northern Costa Blanca, at Blanca International we find foreign buyers most interested in a 100% mortgage in Spain.

This is for one main reason: after the financial crash in Spain in 2008, most Spanish banks stopped offering 100% mortgages entirely. Spanish buyers know this and expect a typical mortgage of up to 80% of a property’s purchase price.

But after BBVA launched 100% Spanish mortgages in 2018, other banks followed suit. About 1 in 11 mortgages signed in Spain in 2021 were more than 80% of the purchase price, according to the Bank of Spain.

Read on to find out how you can get a 100% Spanish mortgage.

How to get a 100% Spanish mortgage

There are two main reasons why Spanish banks are reluctant to offer 100% mortgages.

First, if the buyer cannot afford the usual 20% down payment, there is a higher risk of defaulting on the 100% mortgage. Secondly, the higher monthly repayments, fewer offers on offer and sometimes additional mortgage guarantees make it more likely that a buyer in Spain will not take advantage of a 100% mortgage plan.

For this reason, the 100% Spanish mortgage is generally limited to the following situations:

  • When the house you are buying is owned by a bank
  • If the buyer is an official
  • If you can demonstrate a high degree of stability in your work
  • If you can prove that your finances are solvent
  • If the buyer is under 35 years old and their parents can provide collateral

According to Bank of Spain guidelines, a buyer should not spend more than 35% of their net monthly income on mortgage repayments. Net monthly income is therefore a metric to demonstrate sufficient solvency for a 80% and up to 100% loan (note that 90% mortgages are also available in these situations).

As many Spanish banks do not publish 100% mortgages, you may need a mortgage broker to request and compare quotes.

You can find Spanish bank owned properties for sale on the leading property portal Idealista, on the dedicated Inmobiliaria Bancaria or directly through a bank’s website like Santander. Properties owned by Spanish banks are often auctioned – you can find them here at Alerta Subastas.

If you are a foreigner looking for a mortgage (not a resident of Spain) the steps can be more difficult to obtain a regular mortgage yourself. Read this guide from WeRelocatetBCN for tips on non-resident mortgages in Spain.

Warning: the disadvantages of a 100% mortgage in Spain

According to JustLanded.com, almost all properties advertised with a 100% mortgage in Spain will have been repossessed by banks from developers who have gone bankrupt. This could have caused liquidity problems, but also because the property failed to attract tenants.

If the property isn’t attracting tenants, it could be because it’s poorly located or in a state of disrepair.

Even more alarmingly, bank-owned properties in Spain have often attracted squatters (read more about squatter laws in Spain here).

The network of Chartered Surveyors at Survey Spain says a property with a 100% mortgage is often a “terrible investment” that Spanish buyers would not touch.

The above reasons make it a wiser choice to first find the house you want to buy and then use the services of a mortgage broker to try and get a 100% Spanish mortgage (read this blog from Mortgage Direct for more information).

If you are looking to buy a home in Javea and/or the northern Costa Blanca you will find exclusive and quality properties at Blanca International.

You can learn more about the taxes and procedures involved Obtaining a Spanish Mortgage in our dedicated article here.

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