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Mortgages Mortgages
Mortgage Valuations
The maximum mortgage you will get in Spain is normally 70% of valuation. Frequently however, depending on the type of property and the valuer’s appraisal the figure will be nearer 45% of the purchase price (basically campo property has for a long time been neglected and unwanted across the whole of Spain, the current upsurge of interest is driven by foreign buyers and has bemused the locals. Spanish valuer’s tend to reflect local tastes and preferences and therefore tend to under value.)
Mortgages have traditionally been paid off in Spain over 10 – 15 years but exceptionally our recommended broker can get this extended to 25 years subject to provisos such as your age.
There is another problem with mortgages. Currency risk. If you borrow in € but earn in GBP then the cost of your mortgage will skyrocket if there are unfavourable movements between the currencies. To explain, when I bought my house just over 6 years ago I changed my life savings at 197 pesetas to the GBP. A good rate at the time. One month later I would have got 215 and the rate did touch 280! Currently it's equivalent to about 260. Now imagine that you borrow today and there is a similar move against you. In GBP terms you would owe 20% more and your repayments would need to be 20% higher. So it always make sense to borrow in your own country in the currency you earn in if at all possible.
Mind you I wouldn’t let this prospect frighten you too much. The value of my property in local terms has also risen by 150% in the same period!
Finally, probably the best place to start if you think you might need a mortgage is to contact my good friend Alex Gaaikema (don't worry his English is absolutely spot on, perfect!) by e-mail at alex@vivacosta.com . He is a mortgage broker we have worked with on several occassions with excellent results.
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