Dotti C. Says:
Is it possible for a retired 73 year old to get a long-term mortgage in Spain?
IL Contributor in Spain Marsha Scarbrough Says:
Hola Dotti!
Age restrictions on getting a Spanish mortgage (called a hipoteca) vary by lender from 60 to 75 years. It may help to put a younger relative on the title with you, but their financials will be scrutinized along with yours. Over 60, banks usually limit the term to 20 years (or less).
As a foreigner, you will be required to put at least 30% down (maybe 40%). However, interest rates are low compared to the U.S.–between 2% and 2.7% for foreigners, depending on whether you are a resident or a non-resident and whether you get a fixed or variable-rate mortgage.
Residents will generally get a better interest rate and have more mortgage options available to them. Most of the major Spanish banks, like Banco Santander, BBVA, and CaixaBank, will still rent to non-resident foreigners, however. Plus, you have the option of getting a mortgage from an international bank or one of the savings banks (Caja de Ahorros).
Closing costs can be quite steep. Figure 12% to 15%. In some provinces, there is a flat 10% sales tax on real estate purchases. Mortgage brokers are available in Spain. They may be helpful, but do your due diligence before you hire one.
One advantage to having a mortgage is that once there is a bank involved, they will hire a gestor to do much of the required leg work regarding the documentation, providing the documents to the notary, registering the property, etc. They will also review the property’s legal documentation and ensure it’s copacetic.
Beware of Spanish bankers’ hours! Not only are the banks’ working days notoriously short, they seem to have their own calendar. Banks are notorious for taking longer than expected to complete their internal operations, so make sure that the purchase agreement has a provision for extension if there are delays by the bank; otherwise, the buyer can be seen as in default and lose the deposit amount by not being able to complete the title transfer on the pre-agreed date.
Editor’s Note: You can find more detail on getting a mortgage and buying a house in Spain in “Chapter 4: Buying (And Renting) a Property in Spain” of our Escape to Spain guidebook. Get it on the IL Bookstore here.