We talk to Katherine Walkerdine, cofounder of Mortgage Direct, about finding the best mortgages in Spain.
Since 2006, Mortgage Direct have been liaising with banks, estate agents and international property buyers in Spain’s ever-changing mortgage market. Mortgage Direct offer independent mortgage advice for international property buyers in Spain.
Katherine Walkerdine talks Spanish mortgages for non residents and mortgages in Spain for residents, whether it’s better to have a variable or fixed rate mortgage and what kind of information you will need to share with lenders.
In this video, Katherine explains how Spanish fiscal residents can borrow up to 80% of the house price, while non residents can usually borrow up to a maximum of 70%. Prospective homeowners should also set aside 10-13% of the house price for taxes and fees.
Katherine also talks about the advantages of taking out a mortgage even if you can buy the house outright in cash. She says Spanish rates can be as low as 2 to 2.5% and that banks pay mortgage costs and taxes.
Many of Mortgage Direct’s clients also borrow just 50%, choosing to invest their cash elsewhere and take advantage of lower rates in Spain.
Katherine lives in Valencia with her husband and business partner and their two children.
(4:00) MumAbroad – How easy is it to get a mortgage in Spain?
Katherine Walkerdine: “As a general rule of thumb, a third of your net monthly income can be attributed to the new Spanish mortgage and it has to take into account their existing debts. For a fiscal resident, someone who is living in Spain and earning in Spain, usually it’s 40% of their net income. So the client’s income has to satisfy the bank’s affordability criteria and the client needs to have if they’re living in Spain the 20% deposit plus 10-13% for fees and taxes.”
“If you’re a non resident the maximum mortgage is 70%. A lot of banks are only offering 60% and that’s due to the new currency risk with new law that came in. By law, if the currency rate goes 20% against the client, the client has the right to change the currency in which they pay the mortgage into their income currency. It’s big risk for the banks especially for clients earning in the US dollar. Some banks won’t lend to clients earning in that currency. One of the main lenders in SPain, one of the biggest banks, will only lend 60% to British clients. The good thing about being independent is we know which bank to go to to get the highest borrowing for the client dependent on the currency that they earn their income in. “