How to Navigate the Spanish Mortgage System as a Foreigner

28 June, 2023 | Alba Tebar

Navigating through the Spanish Mortgage System as a foreigner can be quite a complex process. It is not easy to adapt to a new country, especially if you do not speak the local language and if you are not used to their laws and guidelines of living. However, with the right help and guidance, this problem can be easily solved.

So, always stay properly informed and ask for advice when needed, especially from Spanish Mortgage experts. Only by this way, you will be able to successfully find a good mortgage in Spain for you and your family.

In that sense, if you are lost, do not hesitate to get in touch with Hipotecasplus. We are a team of professional mortgage brokers who have been serving our clients for over 25 years to get them the best conditions and offers in the Spanish market. We are used to connecting our clients with bank entities, and negotiate with them in order to get you the best possible mortgage in the market, according to your personal needs and interests.

So, if you are looking for a mortgage broker to guide you through the Spanish market and make this process easier, do not think it twice! Contact with our offices whenever you need: no commitment will be required!

Anyways, there are some key steps you should know, that will help you to properly navigate through the Spanish Mortgage System. Keep reading this article to find out them and take some notes! We can assure you they’ll be very helpful!


First, it is crucial to do some research in order to understand how the Spanish market works in terms of mortgages. It is important to become familiar with the different types of mortgages you might face, the interest rates, and the most common terms and conditions bank entities ask for.

In general, as a foreign customer, you’ll be financed only by 50% or 70% of the total price of the chosen property. Furthermore, you should know that there are three main different types of interest rates in Spanish mortgages:

  • Fixed rate: In that case, the amount of money you’ll pay as a mortgage will stay unchanged through the total amount of years, you’ll be paying back the loan.
  • Variable rate: In that second case, the loan you must pay will experience some changes through the years, depending on the fluctuations of the market. In Spain, variable interest rates are guided by Euribor (Euro Inter Bank Offered Rate), a rate based on the average interest rates at which a large panel of European banks borrows money from one to another. It changes every week, but your mortgage will normally change every year, adapting itself to the current market needs.
  • Mixed-rate mortgages: are home loans that combine features of both fixed-rate and variable-rate mortgages. They typically have an initial fixed-rate period, wich can range from 3, 5, 7, 10, or 20 years, depending on the bank´s offerings. During this fixed-rate period, borrowers pay a consistent monthly payment regardless of any fluctuations in the Euribor (Euro Interbank Offered Rate). Once the initial fixed-rate period ends, the mortgage transitions into a variable-rate mortgage.



Spanish identification number (NIE) and further documentation

Once you’re quite familiar with the Spanish market, and before you start looking for properties and mortgages, it is primordial that you obtain the Spanish tax identification number (known in Spain as “NIE”). This number will be required for different financial transactions, including applying for a mortgage. So, if you do not have it, it will be impossible to continue with the process.

In addition, it is also very important that you gather all the necessary documentation before applying for a mortgage. In a word, apart from the NIE, further documents will be required for the mortgage application. We are talking about employment contracts, tax returns, income registrations, debts, etc, and also about identification documents, proof of address, and assets or liabilities.

Obtain a mortgage-pre approval

A pre-approval is a letter in which the lender (so to say, the bank entity) states that they are willing to approve the mortgage. Shortly, they give you the vote of confidence to lend you money so that you can obtain the house of your dreams.

In that sense, getting a pre-approval will give you a clear idea of your budget and enhance your negotiating power when making offers on properties.

Choose your perfect destination

Spain is a diverse country with lots of different spots to consider when looking for a new property. From the north to the south and passing through the most important capitals such as Barcelona (Catalunya), Madrid or Alicante (Valencia), the options are wide!

Nevertheless, remember that the price you’ll pay for buying a property will not be the same everywhere: there are cheaper cities than others, depending on the location. In that sense, you’ll find the most expensive houses in Madrid (the capital of Spain), Barcelona (Catalunya), and Valencia, closely followed by Alicante and Palma de Mallorca.

So, one of the main things to know before looking for a mortgage is the exact location you want to stay at. From that point on, you’ll be able to calculate your budget and discover which bank entities operate in that region, to start negotiating with them the best possible conditions for your mortgage.

Property valuation and mortgage offer

Once you’ve decided which exact property you want to live in, it is time to conduct a valuation, in order to determine the property’s market value. This valuation, which is essential for the mortgage approval process, will eventually lead to a mortgage offer from for bank. So to say, depending on the property’s valuation and on your financial profile, lenders will finally give you an offer.

At that point, remember to carefully review the terms and conditions, interest rates, repayment schedule, and associated fees. What’s more, this might be a good time to contact with a mortgage broker or a professional in that market, because it will give you some tips and guide you with the best advice.

Finally, it is important to keep in mind that the Spanish mortgage system can vary depending on the region -it is not the same to buy a property in Madrid than in Valencia-, and on your individual circumstances and preferences. That’s why working with professionals who are familiar with the process will greatly assist you in navigating the Spanish mortgage market, and will assure you a perfect result. You will not regret it!