Mortgages Caixa Bank

The number of new mortgages approved in Spain is a significantly good indicator of the health of the property market today.

According to the latest figures from Spain’s National Institute of Statistics (INE), there were a total of 27,724 new mortgages for home purchases in Spain in April, representing a 34.2% increase compared to the same month last year.

The average amount for a new mortgage was 123,256 euros, a 9.1% increase when compared to April 2017 and the total capital loaned for housing rose by 46.5% year-on-year, to 3.5 billion euros.

The average interest rate at the start of the term for new mortgages taken out in April was 2.66%, a fall of 14.1% compared to the previous year. Most new borrowers opted for variable rate loans (62.3%) and 37.7% chose fixed rates and the average term for new mortgages was 22 years.

The communities with the largest number of new mortgages for home purchases in April were Madrid (6,018), Andalucia (5,154), which includes the Costa del Sol and Cataluña (4,700).

If you are a non-resident looking to buy a property in Spain, we highly recommend seeking financial advice before you visit the Costa del Sol to get a better idea of what budget is most suited to you. This ensures that you take every precaution to make the buying process as simple and effective as possible.

Caixa Bank is a recognised Spanish bank that has served both our resident and non-resident clients’ financial lending needs for over 20 years, financing up to 70% of the total market value of any selected property.

Caixa Bank provide professional services and application forms in all main languages. Subject to the property and your individual financial status, the bank can provide pre-approvals on mortgages within 48 hours. In brief, their most recent offerings constitute:

• Fixed rates at 2.35%
• Variable rates at 1.50% on Euribor
• An early settlement penalty of 0.5%

Interest rates for Fixed rate mortgages of between 10-20 years are:

• 10 years repayment with an interest rate of: 2.95% minus max bonus program of 1.20% (net minimum: 1.75%)
• 15-20 years repayment, with an interest rate of 3.55% minus maximum bonus program of 1.20% (net minimum 2.35%)

Examples of repayments; (without the bonus program)

The Caixa Bank Bonus Program once opened will be checked each quarter and is set up as following:

-0.40%: Sending each month min 600 euros from the personal account to spain+3 direct debits per quarter+3 purchase with VISA card each quarter
-0.20%: Home insurance (with Caixabanks insurance company)
-0.20%: Life or health insurance (with Caixabanks insurance company)
-0.20%: Alarm system (financed with Caixabank at 0% with Securitas Direct)
-0.20%: +25.000 euros in bonds (with Caixabank)

Caixa Bank’s current requirements to apply for a mortgage are:

• A minimum income of 48.000 euros net per year (after tax)
• Maximum debt ratio: 30% (maximum payments of loans and mortgage here and in their home country) can be maximum 30% of their net income after tax payments.
• Maximum mortgage period of 20 years (up to 75 years of age)

The documents the bank will need depend upon the situation of each person. If the applicant is employed, the documents required are:

1. Spanish property purchase contract or reservation document
2. Last 3 pay slips
3. Credit history report
4. Last 2 tax returns and/or P60 (or annual salary letter).
5. Bank account statements for the last 6 month where we can see deposits of salary, bonus or dividends, etc., and other movements such as loans, mortgages, etc.
6. Recent mortgage/loan statement (from any mortgages or loans in their home country)
7. Recent savings account statement
8. Any other documents supporting other sources of income, eg. Company financial statements, pension certificate, etc.
9. Colour copy of passport
10. Mortgage application form duly filled out and signed NIE, if available
11. Purchase contract (if they have)+ nota simple

If you are self-employed, the bank will require 2-3 years of financial earnings of the company as well as the personal information described above.