- spain@spectrum-mortgages.com
- +34 936 658 596
Case Study: Structured Financing for a €2M Second Residence in Mallorca
Client: High-Net-Worth Fiscal Resident
Objective: Strategic Mortgage for Capital Efficiency
This case highlights how a carefully structured, asset-based mortgage strategy enabled a high-net-worth client to acquire a €2M villa in Mallorca—despite complex financial circumstances and non-traditional income.
Client Profile
Client Profile
- Nationality: EU citizen
- Residency: Spanish fiscal resident for over two years
- Occupation: Entrepreneur with an established, privately held company
- Wealth Profile: Significant personal and corporate assets; limited salaried income
- Existing Holdings: Owner of a primary residence in Spain (this was a second home purchase)
- Goal: Finance the acquisition through a Spanish mortgage to preserve liquidity for other strategic investments
Financing Challenges
* Second Home Classification: Lenders often view second residences as higher risk, leading to more conservative lending criteria or outright financing restrictions.
* High Property Value: Properties exceeding €1M require bespoke lending arrangements, often facilitated through private banking channels.
* Loan-to-Value (LTV) Limits: For non-primary residences over €1M, most Spanish lenders cap LTV at 50–60%, requiring substantial equity contribution from the client.
Given the client’s strong asset base and irregular income profile, we structured a proposal emphasizing balance sheet strength and future liquidity rather than traditional cash flow.
Key elements of the solution were: validated net worth and unencumbered assets, ongoing liquidity event (business cash flow and potential partial sale), equity in existing Spanish property and openness to placing Assets Under Management with the lender or pledging additional collateral, if required.
Final Loan Terms Secured
This case demonstrates how a strategic, asset-based lending approach—combined with strong private banking relationships—can unlock financing opportunities for clients who are asset-rich but temporarily income-light. Expertise in navigating these nuanced situations makes all the difference.
We specialise in advising private clients, entrepreneurs, and international buyers on structured financing solutions that respect both the complexity and confidentiality of high-value transactions.
* Second Home Classification: Lenders often view second residences as higher risk, leading to more conservative lending criteria or outright financing restrictions.
* High Property Value: Properties exceeding €1M require bespoke lending arrangements, often facilitated through private banking channels.
* Loan-to-Value (LTV) Limits: For non-primary residences over €1M, most Spanish lenders cap LTV at 50–60%, requiring substantial equity contribution from the client.
Given the client’s strong asset base and irregular income profile, we structured a proposal emphasizing balance sheet strength and future liquidity rather than traditional cash flow.
Key elements of the solution were: validated net worth and unencumbered assets, ongoing liquidity event (business cash flow and potential partial sale), equity in existing Spanish property and openness to placing Assets Under Management with the lender or pledging additional collateral, if required.
Final Loan Terms Secured
- Loan Amount: €1.2M (60% LTV)
- Term: 20 years/li>
- Interest Rate Options: *Variable: Euribor + 1.10% → Approx. €6,959/month (first year) *Fixed: 2.15% → Approx. €6,156/month
- Flexible Repayment: Interest-only option for the first 2 years offered by select lenders
- Early Repayment: No penalties for partial prepayments
- Time to Approval: Conditional approval issued within 3 weeks
This case demonstrates how a strategic, asset-based lending approach—combined with strong private banking relationships—can unlock financing opportunities for clients who are asset-rich but temporarily income-light. Expertise in navigating these nuanced situations makes all the difference.
We specialise in advising private clients, entrepreneurs, and international buyers on structured financing solutions that respect both the complexity and confidentiality of high-value transactions.