Home » Financial » Mortgage calculator

Mortgage calculator

Calculate first what it will cost you

Andalucia Real Estate/Realty/Property works with both Dutch and Spanish speaking lenders.

Unfortunately in Spain, there is not the extensive range of different types of mortgages that we have at our disposal in Belgium or the Netherlands.

Also important to know is that the banks' criteria for granting mortgages are getting stricter by the day because of the global crisis in the mortgage market. Whereas before banks would lend 80% of the estimated value of the property, nowadays one has to be satisfied with only 60 to 70 %!

Overall, there are 3 standard types of mortgages:

  • The annuity mortgage: In this type of mortgage, a fixed amount (the annuity), is paid to the lender. In the beginning this periodic payment will be mainly paying off interest; at the end of the mortgage this changes to mainly redemption. You pay a fixed amount per month. At the end of the term you have full ownership of the property.
  • The interest-only mortgage: you only pay off interest, not capital. The amount of the loan does not change during the term not because you simply do not pay off capital. Interest only mortgages are often used in the purchase of real estate as an investment. The big advantage is the low monthly fee.
  • The hybrid: Annuity mortgage which is interest-only for 1 to 5 years. This is a good way to keep the costs down in the beginning. The amount saved can be used for embellishment or renovation, for example.

Maximum loan

To foreigners, Spanish banks do not grant loans for a 100% of the value of the property.

The maximum mortgage is currently 60% to 70% of the estimated value of the property. (In 2007 this was still 70-80%).

Apart from the sale price of a property you need to take into account an additional 10 to 11% costs: 7% transfer tax, +/- 0.25% notary and +/-0.15% registration fee, financing cost 1-2% on the deed price, 1% legal fees on the sale price. This means that you always need some own funds to buy a house in Spain.

Duration

For annuity mortgages a duration of 30 years (sometimes up to 40) is usual. On this point Spanish banks are more flexible than their Northern European counterparts that tend to limit the duration to 20-25 years.

However, banks apply a maximum age limit for granting a mortgage. Maximum age ranges from 70 to 80 years.

Interest

Generally, interest rates on mortgages in Spain are based on the Euribor.

This is an interest rate used by many European banks. To reduce the risk of interest rate fluctuations, it is possible to fix the interest rate on your Spanish mortgage for a certain period of time. Apart from the Euribor rate each bank applies its additional own charges!

Evaluation or assessment of the property

It is always required to have an evaluation made of the property by an independent assesor, appointed by the bank. There are 3 possibilities:

  • The estimated value of property is equal to the selling price.
  • The estimated value of the property is lower than the selling price.
  • The estimated value of the property is higher than the selling price.

You will need to make some own calculations as to the financing of the property and the availability of own resources. Maximum credits allowed to foreigners go up to 70% of the estimated value of the property. On top of the selling price of the property you must take into account an additional 10-11% for purchase costs.

Practical example: For a property with a selling price of € 300,000 and valued by the bank at € 280,000 *, you will need to finance the following sum yourself:

€ 280,000 x 70% = € 196,000 which is the amount borrowed
€ 300,000 x 11% = € 33,000 purchase costs
Total purchase price: € 333,000 - € 224,000 = € 137,000 *

* the higher the estimated value of the property the less you have to finance yourself.


What are the requirements of the banks as to income?

In general, banks apply a limit of 35% (some banks 40%) of your net income.

This means that you can spend up to 35-40% of your net income on housing costs. It is therefore of great importance to maintain an income in your own country while applying for a mortgage in Spain!

Interest rate (Euribor)

To calculate for yourself, fill in the current interest rate.

Most banks base this interest rate on the Euribor, which is short for Euro InterBank Offered Rate.

As an indication take the most recent date and the rate for 12 months. The type of mortgage will determine whether the interest rate rises or not. The interest-only mortgage is typically more expensive here because the first years you only pay off interest, and no capital.

More information about current interest rates can be found at: http://nl.euribor-rates.eu/

Calculate your mortgage

Main sum:  € 
Interest rate:    %
Duration:    years
 
Monthly expenses
Annuity mortgage:  €   months
Interest-only mortgage:  €   months

Newsletter

Stay informed on our latest news!

  • Experience expats

    It is now 6 years ago that we traded gray Belgium for beautiful, sunny Spain. And believe me, life here is wonderful! We live in Canilla ...

    Johan and Sonja

    Read more...