Did you always envisage buying your home in Spain outright but now find your options limited as a cash buyer? If so, it might be time to join the growing number of buyers who are purchasing with a Spanish mortgage.
Analysts estimate that in 2026 one in four Spanish homes are being purchased in cash while last year this figure was nearer to one in three. Foreign buyers are contributing to this shift away from cash, as they feel the pinch of a rising market and discover the benefits of leveraging their purchase with Spain’s attractive mortgage deals.
In short: A Spanish mortgage is worth considering once cash no longer stretches to the property or area you want, or when leveraging a purchase could reduce currency exposure. Non-residents can borrow from Spanish banks, typically 60–70% loan-to-value, though not every lender offers this. A specialist broker can confirm what’s realistically available before you start viewing.
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Rising appetite for Spanish mortgages
Latest figures show an ongoing appetite for home loans in Spain, both locally and internationally. The number of residential mortgages registered across the country in June was up 10.8% compared to the same month last year, according to provisional data from the Spanish National Statistics Institute (INE). At the same time, the average value of a Spanish mortgage rose 6% to €178,365.
This trend is a continuation of 2025, when there was a 14.5% hike in approved home loans compared to 2024. Foreigners’ share of the market rose 20% year-on-year, reaching their highest ever level, according to Spanish Association of Registrars data. The average amount foreign buyers borrow has risen from 12.7% last year to just under €193,000, a new historic high.
What is fuelling mortgage sales in Spain?
Rising values along the Costas are deemed a key driver in mortgage applications. Cash buyers who previously could afford to purchase their Spanish home outright, typically with savings and/or equity released from a main home, have seen their buying power diminish. The average house price in Spain rose 12.9% between the first quarters of 2025 and 2026, according to Spain’s INE.
Another factor is the competitiveness – and accessibility – of products in Spain. The average mortgage rate there last year was 2.79% while the average across the Eurozone was 3.35%, making Spanish loans comparatively cheap. Like other Eurozone countries, Spain’s banks base their lending rates on the European Central Bank’s 12-month Euribor rate, some on the six-month rate.
Spain’s banks value the foreign market
A wide choice of Spanish lenders who recognise the value of foreign buyers and are willing to offer mortgages to non-resident buyers also helps. Outside of high-value specialist brokers, mortgages can be less accessible to typical second-home buyers in other countries, including France.
“Non-residents can get mortgages in Spain, just not all banks offer them,” confirmed Cristian Boca, head of international department at Spanish mortgage broker iAhorro, in a recent Your Overseas Home webinar. “I’d advise that as a non-resident it’s worth making sure your application is feasible before starting to look at properties. Which is what we can do for clients.”
When and why a Spanish mortgage makes sense
A large proportion of foreign buyers need a mortgage to afford their Spanish property purchase. Rental income from holiday lets is a common way to cover the monthly repayments.
But would-be cash buyers, resident or non-resident, are advised to consider borrowing from a Spanish lender. Given the cheap rates, minimal redemption penalties and range of products available in 2026, it could make financial sense.
Boosting your budget with a small mortgage could enable you to stretch to a larger or better property and/or more desirable area. Meanwhile, savvy buyers might use a Spanish euro mortgage to minimise their currency exposure, waiting for the exchange rate to swing in their favour before paying it off. You can read more about the currency implications of foreign mortgages and how they can assist overseas mortgage-holders here.
“If I were to buy a property in Spain as a non-resident and with no intention to sell anytime soon, right now I would definitely consider buying with a fixed rate product,” said Cristian Boca at iAhorro. “It’s the option 80% of our clients choose. Meanwhile, mixed rate deals with low introductory rates could suit a buyer who intends to sell in the shorter term.”
Watch our webinar on Spanish mortgages
Get ahead by using a broker for your mortgage
The consensus is that foreign citizens should use a broker that specialises in helping international buyers, rather than attempt to approach individual Spanish lenders themselves.
Spain’s mortgage market works differently and on a more local, relationship-based level compared to the UK. Deals can vary even between branches of the same bank. All of which makes experienced brokers with a good network of contacts at a range of banks invaluable. Brokers also take the stress out of the application process and offer an extra layer of reassurance and due diligence during the transaction.
“When you approach a broker, you approach the market,” said Cristian Boca. “We apply on your behalf to different banks and we only apply to banks that we know serve the non-resident market. So, we save you time and energy.”
When a new client registers with iAhorro, he or his team creates a profile for them, works out their maximum budget and then applies to four or five different banks for a decision in principle – these are less formal than the UK’s agreements in principle and are non-binding.
“We push the banks as far as we can to make sure the application is feasible based on certain numbers,” continued Cristian. “What the banks come back with gives clients an idea of offers available to them and at this point they can start looking at properties in Spain.”
Mortgage products available in Spain
Most brokers will have access to exclusive deals or at least ones that are as competitive as anything else offered by lenders on the open market.
Spanish banks offer three products. The most popular currently is the fixed rate deal, where the rate remains the same for whole period of the term, which in Spain are typically be 15, 20, 25 or even 30 years (depending on age and residency). “As an example, in late August clients with a good profile were able to get a rates of 2.5%-2.6% fixed a 20-year term,” said Cristian Boca.
Variable rate products follow the movement of the ECB’s Euribor, so are reset every 12 or six months. Thirdly, there is the mixed rate product. These come with a low initial rate, often below 2%, before a higher fixed rate kicks in.
Getting approved for a Spanish mortgage
Like anywhere, Spanish banks are more conservative when lending to non-residents. The maximum loan-to-value (LTV) is typically 60%-70%, occasionally up to 75%. Residents should expect up to 80%.
In terms of feasibility, lenders in Spain use at a debt-to-income (DTI) ratio. As a rule, they require a borrower to have 30%-40% of their monthly income disposable after all existing debts and mortgage repayments (including the Spanish one) have been covered.
Besides the deposit, buyers should have funds available to cover taxes and fees, both the standard costs that come with a property purchase (transfer tax, notary and legal fees) and the costs that come with a successful mortgage application. Depending on the region, these will amount to 12%-15% of the purchase price, so should considered early in the process.
“When proving funds for the deposit, not all Spanish banks are happy with applicants using equity released from your UK property,” adds Cristian Boca as a useful sidenote. “They prefer to see it as available cash savings.”
This article provides general information and does not constitute financial, investment, mortgage or tax advice. Mortgage suitability and investment decisions depend on your individual circumstances. Consider taking appropriate professional guidance before making financial decisions.
