Many buyers on the Costa del Sol pay cash, but more and more combine their own funds with a Spanish mortgage. The reasons vary: part of their savings is working elsewhere, or they simply don't want all their capital tied up in one property. Spanish banks do lend to non-residents, but at lower loan-to-value ratios and with closer income checks than for local clients.
This article covers what to expect in 2026 and uses a concrete example to show how much of your own money you will need.
How much will the bank lend?
According to 2026 adviser summaries, Spanish banks typically lend non-residents 60–70% of the lower of the purchase price and the valuation. Some banks offer more to strong applicants from certain countries, but that is the exception.
One important detail: the bank uses the lower of the price and the valuation. If you bid above market value in a competitive situation, you fund the whole difference yourself. In a fast-rising sub-market, it is worth finding out in advance where valuations tend to land.
The bank also caps the loan by your income: it checks that all your monthly debt payments, including any loans in Hungary, stay within an affordable share of your income. Because your income is in forints, the bank converts it and takes a cautious view.
What documents will you need?
- Passport and NIE.
- Your Hungarian personal income tax returns for recent years.
- Employer's letter and payslips; if self-employed, company accounts.
- Bank statements for recent months.
- Details of existing loans.
- The private purchase contract (arras) and the land registry extract.
Hungarian documents may need certified translation. Based on 2026 market experience, pre-approval typically takes 5 to 15 working days, and full approval 4 to 8 weeks once the property is identified.
The arras contract usually gives a few weeks until the notary signing, and if you cannot pay, you may lose your deposit. If you are buying with a mortgage, get pre-approval before signing the arras and, where possible, include a financing condition in the contract.
The process, step by step
- Initial assessment: at the start of your search, based on your income and existing loans. This tells you your realistic budget.
- Choosing the property and reserving: ideally with pre-approval in hand.
- Valuation (tasación): carried out by a valuer the bank accepts. If the value comes in below the price, the loan is based on the lower figure and you need more of your own money.
- Offer and documents: the bank provides the European Standardised Information Sheet (FEIN) and draft contract at least 10 days before signing.
- Notary session: before signing, in person or through an attorney.
- Signing: the mortgage deed is usually signed at the same time as the purchase deed, and the bank pays the seller directly.
Early repayment and switching rates
The 2019 law also caps early repayment fees. On a variable-rate loan, the bank may charge at most 0.25% of the amount repaid in the first three years, or 0.15% in the first five years (depending on the contract), and nothing after that. On a fixed-rate loan, the cap is 2% in the first ten years and 1.5% thereafter. Switching from variable to fixed later is free after the first three years, and capped at 0.15% before that.
In practice, a variable-rate loan can be restructured or repaid fairly cheaply later, while a fixed-rate loan costs more to exit. If you expect to sell within a few years, or to pay down the loan from Hungarian income, factor this into your choice.
Who pays what? Spain's 2019 mortgage law
Since Spain's 2019 mortgage law (Ley 5/2019), the split of costs is clear:
| Cost | Who pays |
|---|---|
| Notary fee for the mortgage deed | bank |
| Land registry entry | bank |
| Admin agency (gestoría) | bank |
| AJD on the mortgage deed | bank |
| Valuation (tasación) | borrower |
| Your own copies | borrower |
| Arrangement fee | as agreed, often negotiable |
The law also strengthened borrower protection: the bank must give you the European Standardised Information Sheet (FEIN) and related documents at least 10 calendar days before signing. Before signing, you must also attend a free session with the notary, who checks that you have received and understood the terms.
Fixed, variable or mixed?
- Fixed: set for the whole term, usually 20 to 30 years. Predictable, but the bank prices in the risk.
- Variable: 12-month Euribor plus the bank's margin, reset annually.
- Mixed: fixed for the first 5 to 10 years, then variable.
According to the Spanish financial press, 12-month Euribor averaged 2.952% in August 2026, against 2.112% in August 2025. It rose in almost every month from March 2026 and was above 3% by early September, after the European Central Bank raised its policy rate on 10 September. In other words, payments on variable-rate loans are currently heading up.
Example: a €420,000 flat with a 60% mortgage
Take a €420,000 resale flat in Estepona and assume the valuation comes in at least at the price. At 60% loan-to-value:
- loan: €252,000;
- your own money towards the price: €168,000;
- buying costs (7% ITP, notary, registry, lawyer): approx. €36,100–37,200 (see our article on buying costs);
- total own funds: roughly €205,000, plus the valuation fee.
Monthly repayments at illustrative rates (not a bank offer):
| Rate | 20 years | 25 years |
|---|---|---|
| 3.0% | €1,398 | €1,195 |
| 3.5% | €1,461 | €1,262 |
| 4.0% | €1,527 | €1,330 |
On top of that come the buildings insurance banks usually require and possibly life cover. By law you don't have to buy life cover from the bank, but a lower margin is often tied to it.
Alternatives: borrowing at home, or cash
A Spanish mortgage is not the only route:
- A Hungarian mortgage on Hungarian property. If you own unencumbered property in Hungary, a general-purpose mortgage can fund part of the purchase. The loan is then in forints, which handles currency risk differently, though Hungarian rates and terms differ.
- All cash. Simpler, quicker, and a stronger negotiating position. It ties up more capital.
- A combination. A smaller Spanish loan and a larger own contribution, which also improves the bank's terms.
Which is better depends on your wealth and goals. Our investment advisory can help.
Managing currency risk. If you borrow in euros against forint income, keep a reserve of at least a few months' payments in euros in your Spanish account, and avoid converting at the worst moment. If you let the property, rent arriving in euros provides a partial natural hedge. Size the loan so it remains comfortable even after a significant fall in the forint.
A good financing structure is not the biggest loan you can get. It is the one you can comfortably pay in a bad year.
If you plan to buy with a Spanish mortgage, assess your options at the start of the search. Get in touch and we will connect you with an independent mortgage adviser.
This article is general information and not financial advice or a bank offer. Terms vary by bank and by applicant.
Frequently asked questions
Can I get a mortgage if I am self-employed?
Yes, but banks usually ask for several years of accounts and may expect a larger deposit. Prepare your company documents in advance, with certified translations.
Does it matter that my income is in forints?
Yes. The bank converts it conservatively, and the currency risk stays with you. A weaker forint raises your monthly payment in forint terms.
How long does it take?
Based on 2026 market experience, pre-approval takes 5 to 15 working days and full approval 4 to 8 weeks after you pick the property. Add the mandatory 10-day period before signing.
Can I borrow for an off-plan home?
Yes, but the loan is usually drawn only at completion, against a valuation of the finished home. Stage payments during construction come from your own funds; see our article on new-builds.
Do I have to take out life insurance with the loan?
By law the bank cannot force you to buy life insurance from it, but a lower margin is often tied to that or other products. Compare what the discount is worth against the premium, and whether an independent insurer is cheaper. Buildings insurance, on the other hand, is required by almost every bank.
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Urbán Réka founded Monvero. She works with buyers and investors in Budapest, Dubai and on the Costa del Sol, from setting the budget to signing. This article is for general information; for advice on your own situation, get in touch.
