Banks are currently a lot more enthusiastic about lending again, which is great news for both local and international buyers. They are still erring on the side of caution, however, and you will need at least a 20% deposit and a good financial track record to go ahead with your purchase. If you are eligible for a mortgage, many buyers are sometimes confused as to whether to go for a Spanish mortgage, pay cash or take a mortgage on an existing property outside Spain. Our parters at Mortgage Direct believe it’s a great time to take out a Spanish mortgage based on these top 5 tips:
1. Interest rates available for non-residents buying in Spain are very low now and comparable to rates in many buyers’ home countries. Through Mortgage Direct borrowers can achieve rates as low as annual Euribor + 1.5%.
2. The Euribor is at an historic low and the majority of market commentators believe we are in for a sustained period of low interest rates in the Eurozone.
3. Taking a Spanish mortgage frees up capital that can be invested elsewhere and perhaps in investments that will generate a higher return on their capital in the short to medium term.
4. With a Spanish mortgage, the client can look at considerably more expensive properties than if they pay fully in cash. For example, they may have €500,000 in cash and decide to borrow €400,000 to buy a more desirable property at €900,000.
5. For buyers earning in currencies other than the Euro (e.g. UK Sterling, US Dollars, UAE Dirhams), taking a Euro mortgage allows the buyer to hedge the currency risk, both in terms of their monthly payments and also the capital value of the property.