Mortgage Information

When you buy Property in Mallorca (Majorca) we highly recommend that you purchase it with a local Mortgage? We often find that even cash buyers take out mortgages because of the attraction of low interest rates allowing you to keep your capital for other ventures and not tying it up in a property in Mallorca.
Mallorca Property Mortgages for Non-Residents

As a non resident, most banks in Mallorca (Majorca) will lend you 70% of the value of the property. The value is determined by an independent, bank appointed surveyor who certify the valuation for mortgage purposes. On new properties this can often be higher than the price allowing you to borrow more than 70% of what you are paying for the property. On resale properties the valuation and market price are roughly the same (as long as the property is correctly priced!).

The cost of obtaining a mortgage is about 3.5% of the loan amount including:

* 1% Arrangement Fee
* 1% Stamp Duty on Loan Amount and First Years accrued interest
* 1% to 1.5% Notary, Registry, Surveyor fees.

Still not convinced! Well, the other benefit of taking out a mortgage is that it reduces the equity in your property meaning you pay less wealth tax. Not only does it reduce the base on which you pay but it also reduces the rate that you pay. Why not read up on the cost of ownership of a Property in Mallorca and find out what annual taxes you will have to pay?
What type of mortgages are available?

There are various mortgages available to borrow against your Spanish property. A very popular choice that many of our clients are taking advantage of at the moment is a 15 year Interest Only option with a 30 year term mortgage (subject to status) with a certain well known lender :

* 30 Year Term (Maximum)
* 15 Year Interest Only (Maximum)
* 80 Years of Age (Maximum)
* Monthly Variable Interest Rate: Euribor + ??? Call us to get the latest!
* 1% Arrangement Fee
* NO CANCELLATION FEES, Partial or Complete!!!

The other option is a standard capital repayment option. The advantage of this mortgage is that you pay capital over the entire term of the mortgage meaning that your repayment amount remains fairly level. Secondly, the rate that you pay is calculated annually so you know exactly what your repayments will be for the next twelve months (effectively a one year fixed rate every year!!!). The normal terms and conditions that we can arrange these mortgages for are:

* 25 Year term
* 70 Years of Age (Maximum)
* Annual Fixed Interest Rate: Euribor + ??? Call us to get the latest!
* 1% Arrangement Fee
* NO CANCELLATION FEE, Partial or Complete!!!

And in case that is not enough, the above mortgage can usually be arranged with a one or sometimes two year "grace" period, meaning you only pay the interest for the agreed period!

Don't know how much you can borrow? Why not let us do a FREE economic risk assessment and find out exactly how much a bank will lend you and therefore what property prices to look at?