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Spanish Mortgages  v  UK Mortgages


Many have wondered if it benefits an investor in Spanish property to have their loan processed in the UK or Spain. This article is written for the express purpose of comparing the two in an attempt to help you make an informed decision.

The largest question to answer is whether or not you intend to live in Spain once the purchase is made. It is generally accepted that interest rates are a little lower outside of the UK, but banking with someone you know and trust could make the difference. Today, Spanish banks or ‘Bancos’ are more favourable towards foreigners investing in Spain. For the sake of this article let’s look at this as if you wanted to buy a home in Spain with a bank in the UK, and then we will look at it from the Spanish bank’s view. Mortgages are mortgages, right?  Well, let’s see.

  1. There is first the difference in mortgage rates. When you compare Spanish Mortgage v UK Mortgages, you will find that the latter is a lower by around 5%. Spanish banks also offer several plans so be sure to evaluate them all before you make a final choice.

  2. You will find that competition between Spanish banks is quite stiff. Therefore, you can negotiate with several banks and they will do everything to better the offer of the other bank.

  3. When comparing Spanish Mortgage v UK Mortgages be informed that Spanish banks will not allow you to show projected incomes especially on rent.

  4. When choosing to deal with a Spanish bank you will find that most banks are familiar with the process of property acquisition thus this can be a good resource for further information.

  5. Another advantage of dealing with a Spanish bank is that your mortgage or your liability is in the same currency as your property or your asset.

  6. When comparing Spanish Mortgage v UK Mortgages you will find that interest rates are lower for a Spanish mortgage so your payable monthly interest will not be very high.

  7. When comparing the deposit required with regard to Spanish Mortgages v UK Mortgages the latter is higher by around 20 – 30%.

  8. If you want to rent out your property it helps if your income is in the same currency as your interest payment.

  9. When it comes to Spanish Mortgages v UK Mortgages unfortunately you may not receive favourable terms from a UK banker as most of them are unfamiliar with investing in Spanish property.

  10. When comparing Spanish Mortgages v UK Mortgages it is wise to higher a tax consultant as the tax rules for each country can have a direct impact on the mortgage costs.

  11. Spanish Mortgages require property as collateral, but UK Mortgages, even for purchases in Spain will require, in most cases, collateral in the UK.

When you want to purchase a home abroad it is a good idea to hire some professional help to ascertain the best possible outcome. When comparing Spanish Mortgages v UK Mortgages, the terms of repayment for UK mortgage ranges from 5 years to 30 years while for Spanish mortgage it ranges from 5 years to 40 years. So it is easy to see that there is a little more offered in Spain, when compared to UK.


When all the dust settles down, however, it is left to the judgment of the individual buyer to decide. Hopefully, you are now more equipped to make a comparison between Spanish Mortgages v UK Mortgages. 


Steve Magill is the right source for more information on the Spanish mortgage market. He is a partner in  and a Fellow in the British Association of Entrepreneurs (FBAE). He holds international renown for having hands-on experience in this field.

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10 secrets every spanish property buyer should know
10 Secrets Every Spanish Property Buyer Should Know
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