September 2019

DESPITE the sun, this summer saw banks catch the chills over Spain’s new mortgage laws.

The new rules came into force in June and have had an immediate impact with the number of mortgages on housing falling by 2.5% compared to the figures a year ago.
THIS DROP HAS BEEN blamed on the THE reluctance of banks to grant mortgages in response to the new law.

These new regulations obligate banks to have greater transparency in the granting of loans. The main changes see early redemptions fees reduced with fixed-rate mortgages set at 2% during the first decade and 1.5% from that date onwards. While with variable rate mortgages, the customers can choose to pay in three years, with a 0.25% commission, or five years, with 0.15%. Furthermore, banks may only charge an opening commission, AND ALSO FOR THE VALUATION REPORT.

This is the only commission to survive the new dictat. FLOOR clauses are also prohibited with the banks not able to set a minimum interest on variable rate mortgages from now on. Other, more onerous rules, have also been discouraging the banks from lending.

These include the requirement allowing the borrower TO demand the loan be converted into their home currency IN the event the euro exchange goes against THEM by 20%.

Importantly, the directors of Spain’s largest banks have been optimistic in that they expect this reaction to be only temporary, as the sector adjusts to the new system. And if you share their optimism, the Finance Bureau will be on hand to get you the best mortgage deal possible. We will be in your corner to highlight any hidden fees or compulsory add-ons tucked away in the small print and ensure you get the best possible mortgage rate to suit your needs and circumstances. The Finance Bureau has more than 15 years’ experience in finding expats the best deal possible and making sure they’re avoiding the many pitfalls associated with buying abroad. When it comes to buying a mortgage, getting it wrong is not an option.