Leading mortgage broker company Mortgage Direct have announced a 30% increase in mortgage enquires compared to August 2014. This is similar to the latest data from the National Statistics Institute, which confirmed that the number of new mortgages registered increased by 26.3% for June 2015 compared to the same month last year. It is also encouraging that the average mortgage amount registered grew by 4.2% over the same year.
Mortgage Direct also noted improved conditions for foreign buyers over the last 18 months. Banks have dramatically improved the mortgage conditions they are offering to foreign buyers in an attempt to gain a competitive advantage over other banks in the market. Favourable exchange rates and improved economic conditions in many countries outside Spain have played a crucial role in this shift, however the factor is that the banks are now playing ball.
In general, banks lending in Spain are not as keen on applicants who already have one or more existing mortgages on Spanish properties. Their ideal customers are buying a second home abroad, which will be used solely by the applicants and their family and friends, not rented out. There is not the kind of buy-to-let market that exists in the UK and banks see rental properties as being risky, and thus taking out a second mortgage in Spain can be more challenging than elsewhere. Mortgage Direct do have several banks they work with that will lend 50-70% for second properties in Spain.
Current Mortgage Conditions:
Mortgage Interest Rates
Euribor (0.163%) +1.5% to 3%
Currently 1.66% to 3.16%
Maximum Borrowing (lower of valuation or purchase price)
Fiscal Residents 80%
Non-residents up to 70%*
1 Euro = 0.734 GBP
1 Euro= 1.114 USD
*Depends on client’s profile and country of residence.
Source: Mortgage Direct SL