My experience – understanding mortgages on the Costa Blanca

When I look back over the past years on the Costa Blanca, one topic keeps coming up where many buyers feel uncertain: the mortgage.

I experience it almost every day – clients find their ideal property, but when it comes to financing, a lot of questions arise. That’s exactly why I want to share my experience here – without obligation and without guarantee, but as a practical guideline based on real situations.

In general, Spanish banks make a clear distinction:

If you are a non-resident, meaning you are not tax registered in Spain, you will typically receive up to 70% financing based on the net purchase price.

If you are a resident in Spain and pay your taxes here, your options are significantly better. In most cases, 80% financing is standard, and with some banks even up to 90% is possible.

What many people underestimate is this:
These percentages do not apply to the total purchase price, but only to the net price – meaning without approximately 10% taxes and without additional costs such as notary and legal fees, which usually range between 2% and 5%.

And now comes a very important point that often surprises buyers:

The bank will always carry out its own property valuation.
The mortgage is calculated exclusively based on this bank valuation – not automatically on the agreed purchase price.

If the valuation comes in lower than the purchase price, the buyer will need to provide more equity.

To make this more tangible, here is a practical example:

For a property priced at €200,000:

A non-resident would receive around €140,000 mortgage.
This means:

• €60,000 difference to the purchase price
• approx. €20,000 taxes
• around €5,000 additional costs

→ Total required equity: approx. €85,000

A resident could receive up to €180,000 mortgage
→ Total required equity: approx. €45,000

At first glance, this may seem manageable – but the reality is more demanding.

Banks carry out very detailed checks. A key rule is:
Your monthly mortgage payments should generally not exceed 35% of your income.

And here’s the crucial part:
This includes all existing financial obligations – even those abroad. Car loans, other mortgages or any ongoing payments are all taken into account.

In addition, your personal financial profile is closely examined:

• How stable is your income?
• How long have you been employed?
• What does your income history look like?

To put it simply:
The process is very thorough.

And one final point that many underestimate:
If even one required document is missing, the entire process can come to an immediate stop.

Looking back, I can say that a mortgage is not an obstacle – but it is something you need to understand properly.

And that’s exactly where I support my clients:
Not only in finding the right property, but in planning the financing realistically from the very beginning.

Because in the end, even the best property doesn’t help if the financing is not structured correctly.

Rainer Schmitz