Mallorca is the largest island in the Balearics, accounting for approximately three-quarters of all real estate transactions. The island offers a diverse range of stunning landscapes and a vibrant cosmopolitan lifestyle. Its residential property market has consistently delivered strong returns in recent years, outperforming the national average in Spain. Unlike some resort destinations, including Thailand, where foreigners are unable to obtain a mortgage, non-residents in Mallorca can secure a mortgage with relative ease. For investors considering property for sale in Mallorca, the ability to leverage finance is a huge plus point. In this article, we provide a concise guide to the key aspects regarding mortgage finance for overseas investors.
How can foreigners obtain a mortgage in Mallorca?
Spanish banks offer mortgage options for non-residents between 60-70% of the value of the property, while residents can qualify for financing of up to 80%. Loan terms generally range between 5 and 30 years.
To obtain a mortgage, foreigners must provide:
- Valid passport or NIE (foreigner identification number).
- Proof of income, such as bank statements, tax returns, and employment contracts.
- A credit history check from the buyer’s home country.
- A valuation of the property carried out by the bank.
- An initial deposit, normally between 30 and 40% of the property price.
There are Spanish banks known for offering mortgages to foreigners, among them:
- Santander
- Caixabank
- Banco Sabadell
- BBVA
Additionally, international mortgage brokers specialize in financial solutions for expats where they can help complete the process. Interest rates for non-residents tend to be higher than those for residents.
Buyers can choose between fixed or variable rate mortgages.
In addition to the price of the property, buyers should consider:
- Notarial and legal fees.
- Property transfer tax (normally between 8% and 11%, depending on the value of the property).
- Banking fees and mortgage processing costs.
- Annual property taxes and maintenance expenses.
Process to apply for a mortgage.
- Choose a bank or mortgage broker.
- Obtain a financial pre-assessment to determine debt potential.
- Submit required documents, including proof of income and credit history.
- Obtain a property valuation from a certified bank appraiser.
- Receive bank approval and finalise the mortgage before a notary.
Unlike some resort destinations, including Thailand, where foreigners cannot obtain a mortgage, Mallorca offers a simpler financing process for non-residents, making it an accessible and attractive choice for international property buyers.
Key takeaways
- Mallorca is an excellent destination for foreign property buyers, with relatively easy mortgage access.
- Non-residents can obtain financing of up to 70% of the value of the property.
- The mortgage process is transparent and simple, especially compared to countries like Thailand.
- Foreign buyers should consider additional costs such as taxes and legal fees.
- It is highly recommended to consult with a professional financial advisor to smoothly navigate the mortgage process.
