The total cost of setting up a mortgage in Spain normally ends up being between 10-14% of the purchase price. This variation is partly because some of the fees are fixed, meaning that regardless of the purchase price they will remain the same, resulting in a higher percentage for lower priced properties. In order to know the annual cost of your mortgage, we look at the ‘Tasa Anual Equivalente’ (TAE) which not only includes the interest rate but all of the costs related to the mortgage. It is mandatory for the banks to provide clients with this information.
Opening fee: can be 1% of the loan amount but many banks do not charge an opening fee at all.
Early repayment fee: the legal maximum for fixed rate loans is 2% during the first ten years and 1.5% afterwards. For variable rate mortgages, the fee works in one of two ways. The bank can charge either 0.25% upon repayment during the first 3 years and nil thereafter; or they can charge 0.15% during the first 5 years and nil thereafter.
Changing to a fixed rate mortgage:
Within the first three years of a mortgage – 0.15% .
Within the third to fifth year of a mortgage – no charge.
After the fifth year of a mortgage – no charge.
Early repayment fee for fixed rate mortgages:
During the first 10 years of a mortgage – 2%
After 10 years of a mortgage – 1.5%
Early repayment fee for variable rate mortgages:
Spanish banks have two options if they want to charge an early repayment fee in a variable rate mortgage:
1. If the bank wants to have the option of charging the fee during the first three years of a mortgage, it is 0.25%. When the three year option is applied, there will be no repayment fee after the first three years.
2. If the bank wants to have the option of charging the fee during the first five years of a mortgage, it is 0.15%. When the five year option is applied, there will be no early repayment fee after the first five years.
• Re-mortgage fee: usually 1% of the loan amount remaining.
|Property costs||€||Mortgage costs||€|
|Property tax||14,000||Mortgage tax (AJD)||0|
|Notary fees for property deed||720||Notary fees for mortgage deed||0|
|Registry deed||505||Registry fee||0|
|Gestoria deed||232||Gestoria fee||0|
|Sub-total||15,457||Bank opening fee||1,000|