Financing a property purchase in Spain: Spanish mortgage or funding from the UK or your country of residence?

Can a property purchase in Spain be financed?

Yes. The two main routes are:

• a loan from a Spanish bank, normally secured by a mortgage over the property purchased in Spain;

• finance obtained in the UK or another country of residence, using security accepted by that lender.

Foreign banks frequently decline to finance property located in another country or borrowers whose income and residence are abroad. Under EU rules, EU lenders cannot reject an applicant solely because of EU nationality, but they remain free to assess residence, income, security and risk. British applicants should also remember that the UK is no longer part of the EU framework. Source: Your Europe

Option 1: a mortgage from a Spanish bank

The Spanish lender finances part of the purchase and normally registers a mortgage against the Spanish property.

Before deciding, the bank may examine:

• current and expected income;

• employment or business stability;

• loans and other financial commitments;

• regular expenditure;

• savings and other assets;

• repayment capacity;

• the value of the property offered as security;

• country of residence and tax residence.

The Banco de España states that the decision should not be based mainly on the property value: the lender must also assess the borrower’s actual creditworthiness. Source: Banco de España

Possible advantages

• The purchased property can generally be used as the security.

• The lender is familiar with Spanish valuations, mortgages and Land Registry procedures.

• The mortgage funds can normally be coordinated with completion before the Spanish notary.

Points to check

• amount actually financed;

• deposit required;

• loan term;

• fixed, variable or mixed interest rate;

• total cost and APR-equivalent information;

• arrangement and other fees;

• early repayment conditions;

• insurance and linked products;

• consequences of missed payments;

• requirements to hold an account or pay income into it.

The headline rate alone is not enough to compare offers. The total cost, associated products and contractual conditions must also be reviewed.

Option 2: finance from the UK or the buyer’s country of residence

A buyer may ask their existing bank or a lender specialising in international or wealth-based transactions.

Possible structures depend on the lender and may include:

• borrowing secured against a property already owned in the UK or the country of residence;

• finance backed by savings, investments or other assets;

• private banking or wealth finance;

• in some cases, a specialist loan for the Spanish purchase.

None of these structures is automatic. A UK bank is not required to accept a Spanish property as collateral.

Possible advantages

• The lender may already know the applicant’s banking history.

• Income, tax returns and assets may be easier to document locally.

• The process can take place in the buyer’s language.

• Existing property or investments may be used as security where the lender agrees.

Possible limitations

• The bank may refuse to take security over Spanish property.

• Another property or assets may have to be pledged.

• The foreign loan and the Spanish completion must be carefully coordinated.

• The date and method for releasing funds must fit the Spanish purchase contract.

• Currency risk must be considered if the loan or income is in sterling while the purchase and repayments are in euros.

Spanish mortgage versus UK or foreign financing

Resident or non-resident: what changes?

Spanish residency is not an absolute condition for obtaining a mortgage, but it can affect the documentation and risk assessment.

For a Spanish resident, the lender may focus on Spanish income, employment history, Spanish tax returns, existing loans and the intended use of the property.

For a non-resident, it may request:

• proof of tax residence;

• foreign employment or business documents;

• foreign tax returns and bank statements;

• details of loans held in other countries;

• evidence of savings and deposit;

• proof of the origin of funds;

• translations where required.

Non-resident status does not make finance impossible, but policies vary considerably between banks.

Documents commonly requested

Depending on the case, the lender may request:

• passport or identity document;

• NIE;

• proof of address and tax residence;

• employment contract or business records;

• payslips or evidence of income;

• tax returns;

• bank statements;

• evidence of existing debts;

• proof of savings and deposit;

• information about the property;

• documents proving the origin of funds.

Preparing the file before making a binding offer is especially important when the purchase depends on finance.

How much deposit is required?

There is no single percentage that applies to every buyer and every bank. The amount financed depends on:

• purchase price;

• bank valuation;

• residence status;

• intended use of the property;

• income and debt level;

• overall quality of the application;

• the lender’s risk policy.

The buyer must also retain sufficient funds for the part of the price not financed and for the taxes and acquisition costs. Purchase costs should not be confused with the costs of creating the mortgage.

Who pays the Spanish mortgage costs?

Under Spanish Law 5/2019, the borrower pays for the property valuation. The bank bears the notarial, Land Registry, administrative and tax costs connected with formalising the mortgage. This allocation concerns the mortgage deed, not the taxes and costs of purchasing the property itself. Source: Banco de España

What should be compared?

Compare offers on the same loan amount and term, including:

1. amount actually approved;

2. total deposit and cash required;

3. term;

4. fixed, variable or mixed rate;

5. total cost;

6. monthly payments;

7. fees;

8. early repayment terms;

9. insurance and linked products;

10. security requested;

11. time required to release funds;

12. consequences of changes in residence, employment or exchange rates.

The Spanish mortgage process

1. Initial affordability assessment

An early assessment helps establish a realistic purchase budget. A simulation or preliminary indication is not necessarily final approval.

2. Full application

The buyer submits evidence of identity, income, expenditure, savings, assets and liabilities.

3. Property valuation

An approved valuation determines the value of the property offered as security. It does not guarantee loan approval.

4. Mortgage offer and pre-contract documentation

If approved, the bank provides the Ficha Europea de Información Normalizada (FEIN), containing the personalised offer, and the Ficha de Advertencias Estandarizadas (FiAE), highlighting important clauses and risks.

Spanish law generally requires this documentation to be supplied at least ten calendar days before signing the mortgage. In Catalonia, the applicable period is 14 calendar days.

5. Meeting the notary

Before the mortgage is signed, the notary checks that the documentation was received on time, explains the terms and completes the statutory transparency procedure.

6. Signing the purchase and mortgage

Where the Spanish property secures the loan, the purchase deed and mortgage deed are normally coordinated so that the funds can be used to pay the purchase price.

Mortgage activity in Girona and Catalonia in 2025

The Memòria Econòmica de Girona 2025, published in June 2026 by the Catalan Chambers of Commerce, includes a housing-market chapter written by Joan Company Agustí, president of the Girona Association of Property Agents.

According to the report, more than 9,000 residential mortgages were recorded in the province of Girona in 2025, an annual increase of 23.9%.

For Catalonia as a whole, the report also mentions:

• interest rates around 3%;

• almost 75% of transactions at fixed rates;

• an average term of 26 years;

• an average mortgage payment of €845.

These are market observations for 2025, not current offers or conditions guaranteed to an individual applicant.

Source: Memòria Econòmica de Girona 2025, “Mercat immobiliari i habitatge a Girona: proposta de Pacte Transversal”, Joan Company Agustí, pp. 29–30.

Mistakes to avoid

Signing before checking finance feasibility

A verbal indication, online calculation or preliminary study does not guarantee final approval.

Omitting an appropriate finance condition

If finance is essential, the offer or deposit agreement should clearly state the required amount, deadline and principal loan conditions.

Comparing only interest rates

A lower rate does not necessarily mean a cheaper loan. Compare the term, fees, linked products, currency risk and total cost.

Using all available savings for the price

The buyer must retain funds for purchase taxes, fees and property-related expenditure.

Underestimating the timetable

Foreign documents, translations, valuation, underwriting and preparation for completion take time. Finance should be investigated before agreeing an unrealistic completion date.