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Mortgages in Tenerife

Posted by MCM Real Estate on 18.10.2018

Mortgage in Tenerife is a popular and inexpensive way to buy your dream home or to invest in real estate

There are no restrictions for foreign citizens. You can apply for a mortgage at many banks. Loan terms and package of documents are approximately the same.

Mortgage conditions for non-residents of Spain

1.7 – 3.0% per annum, first year

From the second year, Euribor is added to the basic interest rate. For the past few years, the Euribor rate (European refinancing rate) has been below zero.

Fixed interest 2.5 – 3.0%, depending on:

  • Initial payment. The higher the percentage of own money, the lower the interest rate
  • Credit term

Client profile, salary, credit history

The loan amount is up to 80%.
That is, the first installment should be from 20% for ordinary housing.
Fees and products of the bank, on average 2000 euros.

Interest rate and loan terms can be better if you buy property from a bank.
It is important that your monthly mortgage payments do not exceed 35% of your monthly income.

To make a positive decision to grant you a mortgage loan, you must prepare all the required documents and translate them into Spanish.
The translation of documents must be certified by the seal of the translation agency.

When a mortgage loan is approved, the following amounts are added:

– Bank commission for granting a loan – 1.5 – 2% of the amount issued.

– Evaluation of the object by an independent appraiser – approximately 0.02% of the cost. On average, this is 350 – 450 euros, depending on the area of ​​​​the object.

– Notary’s fee for the second notarial deed (which confirms the buyer’s relationship with the borrowing bank)
– 800 – 1000 euros.

– Insurance of the property against all risks (mandatory condition of the borrowing bank) – from 150 to 400 euros per year, depending on the object.

– Registration of a mortgage agreement – Gestion Escritura – 0.02% of the value of the object.

– Other bank products

As we wrote earlier, everything is simple, with a mortgage, the total amount of investment increases by about 12% of the cost of housing

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