Spain sells itself. With year-round sunlight, great local food and a laid-back pace of life, it’s easy to see why so many Brits end up dreaming about a place of their own on the coast or tucked into a hillside town.  

But between the dream and the keys in your hand sits a mortgage process that can look fairly different to the one back in the UK. Here’s what you need to know, step by step. 

1. Know the residency rules first 

Since Brexit, UK nationals are treated as non-EU citizens in Spain, which means you can spend a maximum of 90 days out of every 180 there without a visa. So, if you’re planning to move permanently and become a Spanish tax resident, the rules shift, and it’s worth getting professional relocation advice. 

2. Understand what you’re eligible for 

Spanish lenders commonly offer fixed-rate deals, where your interest rate and your monthly payment stays the same for a set period, and variable-rate mortgages tied to the Euribor, which move up and down with the market. Interest-only mortgages exist but are rare, and often off the table entirely for non-residents. 

The trade-off for buying as an outsider is that banks see you as more risk, so expect to put down a bigger deposit and face a stricter debt-to-income ratio than a Spanish resident would. The bigger your deposit, the better that ratio looks, so if you can stretch to more upfront, it’s usually worth it. 

Age matters too. There’s no official cut-off, but banks get cautious about lending to anyone over 65. Retirees can still get a mortgage with a solid pension behind them, sometimes with a guarantor. Lifetime Loans exist for over-65s with a pension, but you’ll need residency to qualify, so that route is closed to non-residents. 

3. Get your paperwork together 

You’ll need the usual: proof of income, proof of address, ID, a record of your assets and debts, your UK credit rating, and deeds to any property you already own. On top of that, you’ll need an NIE, which is a Spanish tax ID number, without which you legally cannot buy property in the country. Get this early; it’s issued through a Spanish consulate or embassy and can take time. 

4. Follow the application process 

Start by shopping the market — either directly with Spanish banks or through a broker who knows which lenders are actually receptive to non-resident applications. A good broker can save you weeks of dead ends. 

Next, make sure your paperwork is in order, including that NIE. Then find your property and, ideally, secure pre-approval before you make an offer — it puts you in a stronger position and speeds up everything downstream. Once you’ve agreed a price, the lender will value the property and assess your finances before issuing a formal offer. Read it properly before you sign anything. 

Assuming your documents are ready to go, the whole process typically takes six to eight weeks. 

5. Budget for the full cost 

Beyond the mortgage itself, expect some additional expenses. This includes a valuation fee (roughly €300–600) and a completion or arrangement fee from the lender (around 1% of the loan), plus broker fees, legal fees, and stamp duty, which varies by region. 

Early repayment charges also apply if you pay off the mortgage ahead of schedule, and they’re capped by law, though the cap depends on the type of rate. Variable-rate mortgages carry the lighter penalty: up to 0.25% if repaid within the first three years, dropping to 0.15% between years three and five, and nothing at all after that. Fixed-rate mortgages are penalised more heavily: up to 2% if repaid within the first ten years, dropping to 1.5% after that. 

6. Choose between a Spanish bank and a UK bank 

Most major Spanish lenders — Santander, BBVA, CaixaBank, ING, EVO, to name a few — will lend to non-residents. Some UK banks with a Spanish presence also offer international mortgages, which means arranging everything in English and skipping the credit-history translation headache. The catch is a smaller pool of products and rates, so it could end up being pricier. 

7. Don’t forget currency risk 

If your income’s in sterling and your mortgage is in euros, your monthly repayment will shift with the exchange rate, sometimes in your favour, sometimes not. It’s worth having a plan for that before it becomes a surprise, rather than after. 

Working with a currency specialist like Lumon can help with the money-moving side of buying a property in Spain, from deposit to monthly repayments, so that part of the process is one less thing to think about while you’re settling into somewhere new. 

Sources 

1. UK Government – Entry requirements: Spain 

1. Bank of Spain – Fixed and variable rate mortgages 

1. Bank of Spain – Mortgage-related expenses 

1. Government of Spain – Property taxes 

1. Bank of Spain – Early redemption 

This article is a promotional feature produced in partnership with Lumon. It is intended for general information purposes only and does not constitute financial, legal, or investment advice. Currency exchange involves risks, and past performance is not indicative of future results. Lumon Pay Ltd is authorised by the Financial Conduct Authority as an Electronic Money Institution (FRN 902022) to issue electronic money and provide payment services in the UK. Registered office: 20 Farringdon Road, London EC1M 3HE.