When buying a home in Spain, many buyers opt to take out a Spanish mortgage rather than funding the property purchase outright. Mortgages in Spain make a lot of sense as they not only help to manage currency risks but also increase your available budget, allowing you to target a higher property price and secure a better home or investment opportunity.
With this in mind, let’s explore every reason why you should consider a Spanish mortgage when looking to buy your dream home abroad.
1. Protect Against Currency Fluctuations
If your liquid funds are in a currency other than the Euro, you could fund part of the purchase by getting a Euro Mortgage – also known as a Euro-denominated mortgage. Instead of transferring all your funds at once into euros, you can keep some in your home currency. This will offset any currency fluctuations when sending funds to Spain to cover the deposit and costs.
2. Increase Your Buying Power
You may feel that your cash budget doesn’t stretch to get you the property you really want. But by taking out a mortgage, you may be able to increase your overall purchase price budget, giving you access to higher-value properties or more desirable locations than if you paid entirely in cash.
3. Enhance Investment Potential
Suppose you purchase property for investment, and you wish to receive a rental return. In that case, it’s worth considering buying a better property in a more desirable location. These types of properties are more likely to attract stronger rental demand and achieve better yields that enable your investment to work harder for you in the short and long term.
4. Take Advantage of Low Interest Rates
Interest rates are currently very low. In fact, as of October 2025, interest rates in Spain remain very competitive, typically between 2% and 4%. Our clients are taking advantage of these historic rates to maximise their cash and utilise their liquidity for other important purposes or investments. Most lenders use the annual Euribor (Euro Interbank Offered Rate) as the base rate and then add their own margin to this.
5. Maintain Financial Flexibility
Raising mortgage finance against unencumbered Spanish properties is almost impossible, making these properties very illiquid. This means that the property would normally have to be sold to release quick cash against it for any reason, apart from home improvements.
Some specialised lenders can do this type of lending, but they tend to be more expensive than high-street options, which do not offer this at all. We receive many enquiries from cash buyers desperate to release funds to sort out issues back home or invest in other projects or investments, but they come to realise that they should have bought with a mortgage in Spain, thereby not tying up their cash.
It can take a long time to sell a property in Spain, just like in any other country. Property is not a very liquid asset like bonds and shares because it cannot be sold within minutes. It can take several months.
6. Localise the Debt to Spain
The debt is against the asset in the country where the asset is held, i.e. Spain. This is a good idea mainly because if there were an issue in your home country, the lending would remain in Spain, and it would be difficult for the Spanish lender to raise a concern in the country where you are resident.
7. Gain an Extra Layer of Legal Protection
Spanish banks will do their own legal due diligence against the property, meaning that if the bank will not lend against the property, it probably isn’t worth buying, and it may even have legal issues, such as not being properly registered. This offers you, the buyer, an extra layer of security when you purchase.
8. Enjoy Flexible Repayment Options
Short-term Spanish mortgages are available, so you don’t have to be tied into a long-term mortgage here. You can obtain a flexible mortgage that allows you to cancel the mortgage at any time without incurring heavy redemption penalties.
A perfect example of this is if a client is expecting a lump sum in the near future (i.e. tax tax-free pension lump sum, sale of a property elsewhere or a bonus payment from your employer), the mortgage can be cancelled in full or part, leaving no charge against the asset.
9. Expand Your Property Portfolio
You may have the ability to purchase more than one Spanish property if you wish to create a small holiday home letting portfolio here in Spain. Contact our team, and we can advise you on the best way to do this.
10. Access Mortgages at Any Age
Unlike in many other countries, age is not much of an issue, and Spanish mortgage providers are open to lending to older buyers who can lend on pension income.
Getting a mortgage for Spanish property purchases
When applying for a Spanish mortgage, your loan-to-value (LTV) ratio will be one of the main factors determining how much you can borrow. Local banks typically lend up to 70% of the property price for non-residents, but this can vary depending on net monthly income, resident status, credit history, and property value.
So, how does the mortgage application procedure work?
The mortgage process:
- Open a bank account in Spain
- Mortgage pre-approval – You need to provide financial records such as proof of income and bank statements before the lender can make an offer.
- Property valuation – To confirm your chosen property’s market price, the bank will request a valuation before making a loan offer.
- Mortgage offer – Your bank will issue a formal offer after reviewing your documents and house valuation, outlining the terms of the agreement.
- Legal checks – A lawyer and the bank will verify the property’s legal status through title deeds and planning permissions.
- Signing mortgage documents -The bank transfers the loan funds, and the ownership is passed to you after you sign the mortgage and property deeds.
- Registration – The notary registers both deeds with the Land Registry, and your mortgage becomes an official charge on the property.
Getting in touch
A Spanish mortgage isn’t just about borrowing money – it’s about making your capital work smarter.
Fluent Finance Abroad have been in the field for almost 20 years, and offers expert advice when it comes to getting a variable or fixed-rate mortgage in Spain. Our understanding of the Spanish mortgage market is extensive, and owing to our reputation with the Spanish lenders as a trusted mortgage broker, we have been able to secure exclusive mortgage rates for our clients during the buying process.
From residential mortgages to loans for non-residents, we can assist you in finding the most suitable deal for your unique requirements. To speak with a financial specialist, call us today on +34 952 85 36 47 or contact us online for advice you can depend on.
