Getting a Spanish mortgage as a non-resident

Who the law protects

Article 2 applies the law to loans granted by professional lenders where the borrower or guarantor is an individual and the loan is either secured by a mortgage on residential property or intended to acquire land or buildings (the second case when the borrower is a consumer). Garages and storerooms count as residential when they serve a domestic function. Nothing in articles 1 or 2 limits it to residents of Spain. Article 3 makes the protections mandatory: a clause waiving them in advance is void. Its notarial rules refer to a mortgage on a home “situated in national territory” (article 22), so a Spanish lender financing a UK, Canadian or US resident’s purchase in Spain falls within it.

A loan whose borrower is a company is outside this protection, as are the exclusions in article 2.4 (for instance loans from an employer to staff).

The process the law sets

Information before signing

Under article 14.1 the lender must hand over, at least ten calendar days before signing:

• the FEIN (Ficha Europea de Información Normalizada, the standard European information sheet), which is a binding offer for at least ten days;
• the FiAE (Ficha de Advertencias Estandarizadas, standard warnings sheet);
• for variable-rate loans, a separate document showing instalments under different interest scenarios;
• a draft contract with all costs itemised;
• clear information on which costs the lender bears and which the borrower bears: the appraisal is the borrower’s; the notary’s fees for the mortgage deed are the lender’s, and copies are paid by the person who requests them; registration of the guarantee is the lender’s; and the stamp-duty tax on the deed follows the tax rules.

The law also requires the lender to warn you of your right to free, personalised advice from the notary of your choice.

The notary’s record

Article 15 requires you to appear in person before the notary you choose, so that he can check the lender’s documentation and record the questions you asked and the advice given, article by article. You answer a short test. Article 15.3 says the borrower, “or whoever represents them for this purpose”, must appear at the latest the day before the deed is signed. If the documents were not delivered in time, or you do not appear, the notary records it and the mortgage deed cannot be authorised (article 15.5). The deed itself must be a public deed when the mortgage is on a home in Spain (article 22). If you cannot travel, see buying from abroad with a power of attorney.

Language

Ley 5/2019 contains no general rule that the FEIN must be supplied in a language the borrower understands. The FEIN model in annex I has a line for the case where the lender proposes to use a language other than the FEIN’s, stating the language in which information and contract documents will be provided. For the signing itself, the Notarial Regulation (article 150) provides that if a foreign party does not understand Spanish, the notary may translate orally if he knows the language and record it, use a two-column deed if the foreigner asks, or require an interpreter appointed by the party. Ask the lender early in which language it will supply documents, and the notary what he can do.

The lender’s assessment

Article 11 requires the lender to assess solvency in depth: employment, current and foreseeable income, assets, savings, fixed expenses and existing commitments. The lender may not rely predominantly on the value of the property beyond the loan. It must consult your credit history at the Bank of Spain’s risk register and a private credit agency (article 12); the file of someone with a credit history abroad is therefore the lender’s matter. Article 13 requires an independent appraisal of the property before the contract. The Bank of Spain explains that the amount of the loan is tied to the appraised value, “normally up to a maximum of 80%”. Whether a lender asks a non-resident for a larger deposit, income documents from another country, or a different rate is a commercial decision: ask each lender for its criteria in writing. Payotte has not read any lender’s conditions and gives no figures.

Currency of the loan

Article 4.27 defines a foreign-currency loan as one denominated in a currency other than that of the Member State where the borrower lives, or other than that in which the borrower has assets or income. If your loan is in a foreign currency, article 20 gives the right to convert it to the currency in which you receive most of your income or hold most of your assets, or to that of your state of residence, at the ECB rate on the date of request unless the contract says otherwise. The lender must report if the amount owed moves by more than 20% because of exchange rates. A euro loan carries no such right, so a borrower who earns in sterling or Canadian dollars bears the exchange-rate risk of euro payments.

The NIE

You need an NIE (foreigner’s identification number) to buy. The FCDO describes it as required for any fiscal transaction in Spain, such as opening a bank account or buying property, and says buyers outside Spain can request it at a Spanish embassy or consulate or through a representative. The law also bars the Land Registry from registering a deed unless the tax identification numbers of everyone appearing are on it (Ley Hipotecaria, article 254.2).

If you cannot pay

The FCDO warns that if you cannot keep up repayments the Spanish bank could repossess the property; and if its value is below the debt, the bank may pursue your UK assets to recover the shortfall using a European Enforcement Order. That page dates from 2021 and is under review; treat it as a caution to ask a lawyer how enforcement against assets in your country would work. Article 24 of Ley 5/2019 sets the conditions for early maturity after missed payments.

Which professional to consult

An independent mortgage intermediary registered under the law, a lawyer registered with a Spanish bar association (colegio de abogados) and the notary of your choice for the free pre-signing advice. See mortgage lenders and property lawyers.