In all cases the bank will need proof that you have sufficient income to make the monthly repayments.

‘Interest o­nly’ mortgages, an important protective product for Spain, are now widely available with IO terms up to 30 years. The normal availability is between 5 and 15 years.

Loan terms can now be up to 40 years or age 80.

Q.What do we do to get the best loan possible?

A. You have 2 choices; shop around or use a specialist mortgage broker.

Be mindful though that the lending system in Spain, as with the process and
risks associated with purchasing a property here, are very different
than the UK. Caution is warranted and, for that reason alone, be sure
you are using an independent solicitor and independent Financial
Advisor to cross check your actions.

Generally, costs are much of a muchness but bear in mind that ‘Interest o­nly’
mortgages
are very important for general financial planning and protection and it
is mainly the international banks that offer these.  

1. Start up commission: this will range from 0.5% to 2% of the loan.

2. Reference rate: the banks use different reference rates. The most
   transparent reference rate is the EURIBOR, which is published daily in all
   thenewspapers and o­n the internet.

3. Differential: This is the percentage that the bank charges o­n top
   of the reference rate. If the reference rate is Euribor the differential
   applied will be between 0.75% and 2%.

4. Early repayment commission. This will range from 0% to 1%.
   

Regardless of which bank you or your broker select, you need to includethe following extraexpenses;

1. Valuation fee. The bank will charge you for the valuation which
   will be actioned by an independent company chosen by the bank. The charge will be a minimum 250 euros and up to 0.2% of the valuation
   figure.
2. Notary fee for the mortgage deed. Allow 0.5% of the loan as a maximum.
3. Registrars fee for registration of the mortgage deed. Normally 250 euros.
4. AJD mortgage tax. Allow 1.6% of the mortgage sum.

When canceling the mortgage, apart from the cancellation commission to the bank, you need to count o­n the following fees to complete the documentation:

1. Notary fee for the cancellation deed. Normally circa 0.5% of the loan.
2. Registrar’s fee. Allow 250 euros.

Be aware also that if you are buying a building under construction, the builder
has sometimes already set up a construction take mortgage that you can choose to take cover.
However,
whilst this will save you certain costs as above to the tune of 2%, the
mortgage will unlikely offer ‘Interest o­nly’ which is a key product to
protect you in Spain.