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Buying a house is an important step. In addition, in most cases, it is something that is only done once in a lifetime. Therefore, it is important to know all the options you have before making a decision.


Unfortunately, few people have the necessary money to be able to pay it without having to apply for a mortgage, and choosing it is usually accompanied by many doubts.


Buy or rent?

It is a very recurring doubt and does not have an easy answer, since it depends on the personal context of each one and the situation of the real estate market at the time you make the decision.


When it comes to getting out of doubt:

Compare the price of the rent with the installment of a mortgage. If the mortgage fee is lower, equal to or slightly higher than the rental price, it would compensate for the purchase, since it is a good that will end up being yours at the end of the life of the loan.

Your income level and your personal situation.


How much money should be used to pay the mortgage?

Paying the monthly installment of a mortgage involves 2 blocks of cost:

20% of your own resources are allocated to the entrance of the house, since banks do not usually finance more than 80% of the mortgage value.

There are a series of expenses associated with the purchase and sale of the house that you have to assume, depending on whether the house is newly built or second-hand: VAT/IGIC, property transition tax, etc. These expenses usually account for between 10% and 12% of the value of the house. You can read more details in the article about expenses when you buy a new home in Spain and What to keep in mind when buying a property in Spain.


What expenses does the bank cover?

With the new mortgage law, banks have to assume the expenses associated with the mortgage, such as notary or property registration, among others. You might want to read about Euribor and how it affects mortgages


Which mortgage is better?

It depends. Mateo recommends thinking about the relationship you want to have with your mortgage installment. If you want to insure the same amount for the life of the loan, you are compensated by the Fixed Mortgage; if you want to pay less at the beginning, the Variable Mortgage is a good option.

Usually, there are 3 types of mortgages: Fixed, Mixed and Variable. Thus, each client can assess which of them best suits their situation.


Can you save on the mortgage fee?

Yes, usually banks give you some discounts if you buy some additional things from them like:

If you direct your payroll, you can save 0.30% of the monthly fee.

If you take out the home insurance from them, a 0.10 %.

And if you combine them, 0.40%. The percentages given just as an example.


How do you apply for a mortgage?

Usually you prepare all the documents required by the bank and send it to them by email or some banks offer online application process.


I would also recommend you to read an article What to keep in mind when buying a house or an apartment in Spain?

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I'm Spanish Adviser and you can ask me any question related to Spain. Our people speak 🇬🇧 🇺🇸 🇪🇸 🇩🇪 🇫🇷 🇺🇦 🇷🇺.

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  • 2 weeks later...

I'm beginning to doubt if it's advantageous to purchase a vacation home in Spain, given that it can be rented out in January/February. Are people buying fewer holiday homes since Brexit? The pros and cons of buying versus leasing!

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@MarkInt thanks for your question. There is no single and simple answer because it depends on your personal circumstances. There are people who prefer to own / no matter Brexit or not because property is a good investment and saving, no recurring rental costs, you live in your house / apartment and do whatever you want. Renting brings limitations, monthly payments to just someone else, but you will need to pay insurance yourself, make repairs if needed. People are arguing if Brits are selling since Brexit. The single answer is people are buying and selling, in some areas numbers are still growing up. 


For rental, you would need to apply for a license. The procedure is not complicated, but some paperwork is needed. Here is an article about short-stay rentals in Spain and getting the license for vocational rental

I'm Spanish Adviser and you can ask me any question related to Spain. Our people speak 🇬🇧 🇺🇸 🇪🇸 🇩🇪 🇫🇷 🇺🇦 🇷🇺.

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