Spanish mortgages for non-residents: what the law actually gives you

Most of what is written about Spanish mortgages for foreign buyers is about percentages: how much a bank will lend a non-resident, what rate to expect, which bank is friendliest. Almost none of it is about the law, and the law is where the useful part is. Since 2019 Spain has had a mortgage statute, Ley 5/2019, that tells the bank what it has to give you, what it has to pay for and what it cannot do. It applies to any individual borrower. Nothing in its scope depends on where you live.

What follows is what that statute actually says, plus the two rules from outside it that decide whether the mortgage exists at all.

Ten days, a binding offer, and nothing to sign

Before you sign, the bank must hand over a fixed set of documents at least ten calendar days ahead of the deed: the standardised information sheet known as the FEIN, a second sheet listing the clauses that deserve attention, a worked example of what happens to the instalment if rates move, the draft contract, and a breakdown of who pays which cost. The FEIN is a binding offer for the whole of that period. Ten days is the minimum; the parties can agree more.

There is no cooling-off period afterwards. Once the deed is signed, it is signed. The protection is all in front of the signature, which is why the next step matters.

The notary meeting nobody tells you about

Article 15 requires the borrower to appear before a notary of their own choosing, at the latest the day before the mortgage deed, so that the notary can check the documents were delivered on time, explain the clauses and answer questions. The borrower answers a short test on the contents. The notary records all of this in an acta, and the law fixes its price at nothing. Without that acta the notary may not authorise the mortgage deed at all.

The statute says the advice is obtained in person, and in the next paragraph says the borrower "or whoever represents them for this purpose" must appear. In practice buyers who cannot travel deal with both the acta and the deed through a representative under a power of attorney, but the mechanics of that sit in notarial practice rather than in the law. If you intend to complete from abroad, raise it with the notary early, and read how to grant a Spanish power of attorney from abroad before you go.

Who pays what, and the stamp duty myth

Article 14 allocates the costs, and it is worth knowing because older guides still get it backwards. The borrower pays for the valuation. The bank pays for the gestoría that handles the paperwork, the notary fees for the loan deed, and the registration of the mortgage at the land registry. Copies of the deed are paid for by whoever asks for them.

Stamp duty on the mortgage deed is the one item the mortgage statute leaves to tax law, and tax law has been clear since November 2018: for a mortgage loan deed the taxpayer is the lender. That is article 29 of the stamp duty statute as amended by Real Decreto-ley 17/2018. Any breakdown that still puts the mortgage stamp duty on the buyer is describing the position before that date.

The stamp duty on the purchase deed itself, where it applies, is still yours. That is a different tax event and is covered in buying a second home in Spain.

If you earn in pounds or dollars, the loan is a foreign-currency loan

This is the rule that matters most to buyers from outside the eurozone and appears least often. Ley 5/2019 defines a foreign-currency mortgage by reference to the borrower, not the bank: a loan in a currency other than the one in which the borrower earns most of their income or holds most of their assets counts. A euro mortgage taken by someone paid in sterling or dollars is therefore a foreign-currency loan in the eyes of the statute.

Two things follow. The bank must inform you periodically, and in any case whenever the outstanding debt or the instalments have moved more than 20 per cent against the exchange rate at signing. And under article 20 you have the right to convert the loan into the currency in which you earn most of your income, at the European Central Bank rate on the day you ask unless the contract says otherwise. The article also mentions the currency of the member state where the borrower lives, which for readers outside the EU does not help; the income limb is the one to rely on.

Whether converting is a good idea is a separate question. Knowing the right exists changes the negotiation.

Rates: no floor, and what early repayment can cost

In a variable-rate mortgage the bank cannot set a minimum rate. Floor clauses are prohibited outright by article 21, which also says the rate can never go negative.

Early repayment is not free, but the compensation is capped, and the cap is a ceiling on the bank's actual financial loss rather than a flat fee. For a variable rate the contract picks one of two options: at most 0.15 per cent of the amount repaid during the first five years, or at most 0.25 per cent during the first three, and nothing after that. For a fixed rate the cap is 2 per cent during the first ten years and 1.5 per cent after. Switching from variable to fixed by novation or moving the loan to another bank is capped at 0.05 per cent in the first three years and free afterwards.

The temporary rule that made early repayment of variable-rate loans free ran until 31 December 2024 and has not been extended. Guides that still promise free early repayment are out of date.

Insurance and the valuation

Tying the mortgage to other products is prohibited. The bank can require life cover and buildings insurance as a condition of the loan, but article 17 obliges it to accept a policy from any other insurer with equivalent conditions, both at signing and at every renewal, and it may not charge for looking at the alternative. Combined offers, where the rate improves if you take the bank's products, remain legal; the bank must show you both versions.

The valuation must be done by a valuer or valuation company on the Banco de España register, independent of the lender. You may commission it yourself. A bank is obliged to accept a valuation you bring, provided it is by an approved valuer and has not expired, and while it may check it, it may not pass the cost of that check on to you. That rule is now in article 20 of Real Decreto-ley 24/2021, which replaced the 1981 valuation act.

How much they lend is policy, not law

Non-residents are routinely offered a lower loan-to-value than residents. No statute sets that lower figure. Banco de España has had the power since 2018 to impose limits on lending conditions, but there is no active borrower-facing cap, and nothing that distinguishes residents from non-residents. The percentages are each bank's own credit policy. That is worth knowing when a first offer is presented as the only possible one.

The mortgage does not exist until it is registered

Two rules from outside the mortgage statute decide whether any of the above matters. Under article 1875 of the Civil Code and article 145 of the Ley Hipotecaria a mortgage is validly constituted only when the deed has been registered at the land registry. Until then the bank has a contract but no security, and it will not release funds on that basis.

And the registry will not register a deed unless it contains the tax identification number of everyone who appears in it, and of anyone they represent. For a foreign buyer that number is normally the NIE. This is the reason the NIE is the first thing to arrange and the thing that most often delays completion: the purchase deed, the mortgage deed and their registration all run on it. What it is and how to get it is in buying property in Spain without a NIE number.

Questions we get

Can I sign the mortgage without being in Spain?
The deed can be signed by a representative under a power of attorney. The pre-signing notary meeting is the point to clear with the notary in advance, because the statute describes it as advice given in person while also admitting a representative.

Do I need a Spanish bank account?
Nothing in Ley 5/2019 requires one. Banks usually make an account part of the offer; where it comes with a rate discount, that is a combined offer and the rate without it has to be shown as well.

Do I need the NIE before applying?
Before the deed. What the registry demands is a Spanish tax number for everyone named in it, and for a foreign buyer that is the NIE in all but unusual cases. A bank may begin its assessment without it; nothing can be registered without it.

What if the bank's valuation comes in low?
Bring your own from an approved valuer. The bank has to accept it if it is valid and current.

Why Buenaley?

Buenaley is a Spanish law firm working with international clients. Around a financed purchase there are two things we take off your hands, in this order.

The first is the NIE. Neither the purchase deed nor the mortgage deed can be registered without it, and it is the step that most often holds up a completion. We handle that through our NIE service, for every person who will appear on the deed.

The second is the purchase itself: the registry and planning checks, the deposit contract before you sign it, the community debt position, the bank's cost breakdown checked against article 14, the pre-signing notary meeting and the deed, in person or under power of attorney.

• NIE applications for every buyer, started on day one
• The deposit contract reviewed and negotiated before signature
• Registry, charges, community debts and planning status verified
• The bank's offer and cost allocation read against Ley 5/2019
• Completion under power of attorney if you cannot travel

Holding an offer from a Spanish bank, or a draft deed with a date on it? Send it over and you will hear what stands and what needs changing. Or start with the NIE application, because nothing registers without it.