Affordability

In order for the bank to approve you for a mortgage, they primarily look at two factors to consider your affordability for a mortgage in Spain:
The loan to value and your debt to income ratio

Loan To Value
(or LTV)

Banks usually offer to lend 80% of the purchase price (excluding fees). It is possible to achieve slightly more than 80%, but the client’s circumstances have to be optimal for the bank to consider this. If you are interested in a mortgage of more than 80%, please contact us to discuss whether this will be possible for your situation.

The maximum loan to value banks offer at the moment is 70% of the purchase price. That being said, it is common that they only give 60%. The percentage can vary depending on the country in which you reside/declare your taxes and your mortgage preferences.

Debt to Income
(or DTI)

One of the most important elements when applying for a mortgage in Spain is INCOME and DEBT. The relation between these two is important, as it gives the bank information on how much you are able to pay per month towards a mortgage. The bank will only allow your total debt to represent a certain percentage of your income (normally they will base their calculation on your net income). The percentage will vary on a case by case basis, but for residents the banks will usually accept a DTI of 30-35% (up to 40% in special cases). For non-residents, the accepted DTI is set to 25-35%, depending on the LTV.

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Office: +34-971696292
Christian: +34-695289181
Patricia: +34-699782980

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Disclaimer

*Please note that the new Spanish mortgage law which came into force on the 1st of June 2019 is going to have an effect on many aspects of the mortgage process in Spain. This includes timeframes and eligibility depending on origin of income and residency status. We are working on updating our information. In the meantime, please contact us via phone or e-mail for the most recent information available. Thank you.

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