30th Nov 2020
How crew can get a Spanish mortgage
Crew can mistakenly think that getting a mortgage in Spain is impossible when you aren’t a resident or a Spanish national. However, crew can often get a Spanish mortgage more easily than they’d expect.
Our partner, Mallorca Mortgage Consultancy, regularly helps crew apply for mortages in Spain. We detail the information you’d typically need to apply for a mortgage and an example of a mortgage that Superyacht crew can get. The maximum LTV (loan to value) that non-residents can get in Spain is 70%. This means you will need to have at least 30% of the property value saved plus enough to pay fees.
Below shows a list of documents you’ll typically need to supply to make mortgage applications. Normally you will be required to scan and then email the documents in PDF format:
- Colour copy of your passport and Spanish NIE number (when available).
- Last 24 months bank statements showing personal income if tax declarations are not available. If tax declarations are available, 6 months will be sufficient.
- Last 6 months payslips.
- Current work contract (and previous work contract if your current contract is less than 2 years) or a letter from your employer stating your salary.
- Last 3 years Seafarers Tax Returns (full SA100), this applies for UK clients
- Experian Credit Report available from www.experian.co.uk, or the relevant credit report from your home country
- A bank statement showing the money that you will use for your part of the purchase price.
The type of mortgage crew can get
Most crew, when purchasing their first property in Spain, are looking for a one or two-bed flat. The average price range is between €250,000 and €300,000 depending on location and size.
Below shows some example numbers from Mallorca Mortgage Consultancy.
For the purchase price of €280,000, a 70% mortgage amount of €196,000 is required. Superyacht crew can normally obtain a term of 20 years for a mortgage with a variable rate of 2%.
This may be reduced to 1.5% by taking bank products but this should be a conversation you have with your mortgage broker. Taking a bank’s products may mean depositing a minimum revenue each month and taking home insurance through the bank.
Based on a variable rate of 1.5%, your monthly repayments would be €946.
Please note the above is just an example and the amounts and rates may differ due to your personal circumstances.
Total costs for Spanish property purchase
Mallorca Mortgage Consultancy suggests you allow approximately 11% of the purchase price to cover all taxes and costs involved in the purchase of your property as follows:
|TAXES & COSTS BREAKDOWN|
|Purchase Price||€ 280,000|
|Mortgage Amount 70%||€ 196,000|
|Term in Years||20|
|Variable Rate & Repayments|
|Interest Rate %||1.5|
|Monthly Mortgage Repayment||€ 946|
|Purchase Tax (8% on the first €400,000; 9% on the next €200,000; 10% up to 1 million then 11% on the balance)||€ 22,400|
|Purchase Deed||€ 2,000|
|Lawyer’s Fees Typically 1% + IVA||€ 3,388|
|My Broker Fee @ 1% of the Mortgage + 21% IVA||€ 2,372|
|Bank Opening Fee @ 1% of the Mortgage||€ 0|
|Property Valuation Fee||€ 500|
|Home Insurance per year approx.||€ 350|
|Total Costs||€ 31,010|
|Less Deposit Already Paid||€ 0|
|BALANCE REQUIRED FOR COMPLETION||€ 115,010|
The broker fee is 1% of the mortgage amount (excl. IVA), payable at the time of purchase and is mentioned in the list of fees above.
All mortgages in Spain are on a repayment basis; redemption penalties are standard with all banks (maximum 0.25% during the first 5 years and 0% for the balance of the term).
NOTE: all mortgage offers exclude furniture and the above costs. The lending bank will require a valuation of the property to be conducted by an independent and accredited surveyor before approving your mortgage. Your mortgage broker would typically arrange this. Normally, a short interview in person with the bank and Notary will be required prior to the mortgage being released. Also, you will be required to have a bank account with your mortgage provider.
Perhaps you wish to start saving towards your deposit or you already have the money saved and are ready to buy. Either way, we suggest getting in touch, so we can help you move forwards with your property purchase.
If you are still considering purchasing property and want more information about the pros and cons versus other investment opportunities, we recommend downloading our crew property guide: