Mortgages for UK Buyers in Spain

Mortgages for UK buyers in Spain: the essentials

Getting a mortgage in Spain as a UK buyer is entirely feasible, but Brexit changed the maths. Since the UK left the EU, British citizens are treated as non-EU (“third country”) applicants, which affects both how much a Spanish bank will lend and the taxes you pay as an owner. This guide explains the mortgage rules, deposits, rates and completion costs that apply across the whole Costa del Sol, whether you are buying in Marbella, Estepona, Fuengirola, Mijas or Malaga city. It focuses on new-build purchases from a developer, though the mortgage mechanics are the same for resale.

How much can a UK buyer borrow? Non-resident LTV limits

Spanish banks lend against loan-to-value (LTV), and non-residents are offered less than residents. Residents can often borrow 80% of the price; non-residents are typically capped at 60-70%, and some lenders limit non-EU applicants (which now includes UK buyers) to 50-60%.¹² In practice, plan for a deposit of 30-40% of the price.¹

One critical detail: LTV is calculated against the lower of the bank’s own valuation (tasación) and the purchase price, not the asking price.¹ If the bank values the property below what you agreed to pay, your loan shrinks and your cash deposit rises. Always budget conservatively.

Affordability and the income test

Beyond LTV, Spanish banks apply an affordability (debt-to-income) test. As a rule of thumb lenders want your total monthly debt repayments, including the new Spanish mortgage, to stay within roughly 30-35% of your net monthly income, though the exact threshold varies by bank and is not fixed in law.² You will need to document income cleanly: recent payslips or accounts, tax returns (UK SA302s or P60s), bank statements and an outline of existing commitments.¹²

Interest rates for non-residents in 2026

Non-resident rates run slightly higher than resident rates, reflecting the perceived risk of lending to overseas borrowers.² You can choose fixed or variable:

• Variable rates track the 12-month Euribor plus a bank margin (differential). The 12-month Euribor has eased following ECB cuts and sat in the region of 2.4-2.8% in early 2026; banks add a spread of roughly 1.0-2.5%.²
• Fixed rates give payment certainty for the full term and are widely offered to non-residents.

Terms commonly run up to 20-25 years, often with an upper age limit at the end of the term. Confirm the exact rate, margin and any product-linkage conditions (see below) in writing with each bank, as offers move with the market.

What the mortgage actually costs you

The 2019 Spanish mortgage law (Ley 5/2019) shifted most mortgage set-up costs from the borrower to the bank. The lender now pays the notary and Land Registry fees on the mortgage deed and, crucially, the stamp duty (AJD) on the loan itself.³ As the borrower you are generally left with:

• The property valuation fee (tasación), typically around 300-500 euros.³
• An arrangement/opening fee (comisión de apertura) of 0-1.5% of the loan, if the bank charges one.³

Banks routinely ask you to take out home buildings insurance and, in many cases, life insurance as a condition of the loan, and may offer a lower margin if you do (bonificaciones). These are optional linkages, not legal requirements; weigh the discount against the cost.

Purchase taxes on a new-build (these are on top of the deposit)

Your mortgage covers only part of the price. On top of the deposit you must fund the purchase taxes in cash, because banks do not lend against them. For a new-build bought from a developer in Andalusia you pay:

That is 11.2% in tax on a new-build, higher than the 7% ITP (transfer tax) charged on resale homes in Andalusia.⁴⁵ A reduced 2% ITP can apply to certain resales up to 500,000 euros under the 2026 Andalusian rules, but that is a resale-only relief and does not apply to new builds.⁵ Once you add notary, Land Registry, lawyer and gestor fees, budget around 14-15% on top of the price for a new-build.⁴ See our related guide on buying costs and taxes for the full breakdown.

Off-plan deposits are protected by law

If you buy off-plan and pay stage payments before the home is finished, the developer must, by law, guarantee every euro you hand over. Under Ley 57/1968 and Ley 38/1999 (as amended by Ley 20/2015), each advance payment must be individually backed by a bank guarantee (aval bancario) or insurance policy, covering the exact amount paid plus VAT and statutory interest, and refundable if the developer fails to deliver.⁶ Never pay a developer deposit that is not covered by this guarantee, and have your lawyer confirm it in writing.

The taxes you keep paying as an owner

Owning does not end your Spanish tax obligations. As a non-resident UK owner you face:

• IBI (Impuesto sobre Bienes Inmuebles), the annual municipal property tax, set by each town hall between 0.4% and 1.1% of the cadastral value (valor catastral), which is well below market value.⁷ The rate depends on the specific Costa del Sol municipality.
• IRNR / Modelo 210, non-resident income tax. If you do not rent the property out, you still owe tax on “imputed income”: a notional 1.1% or 2% of the cadastral value, taxed at the non-EU rate of 24% (UK buyers no longer qualify for the 19% EU rate).⁸ Modelo 210 for a given year is filed by 31 December of the following year.⁸
• If you rent it out, rental income is taxed at 24% for non-EU owners, and (unlike EU residents) you generally cannot deduct expenses.⁸

These filings are handled through the Agencia Tributaria (AEAT). Our non-resident tax (Modelo 210) guide covers the process in detail.

When you sell: the 3% retention

When a non-resident sells, the buyer must withhold 3% of the sale price and pay it to the Agencia Tributaria within one month using Modelo 211. This is an advance against your capital gains tax, not the final bill.⁹ Non-residents pay capital gains tax at a flat 19% on the actual gain; you then file Modelo 210 to settle up and reclaim any excess withholding.⁹ The UK-Spain double taxation treaty exists to prevent you being taxed twice on the same gain, but you may still have a UK reporting obligation, so take cross-border advice.

Step-by-step: the mortgage and buying timeline

1. Get your NIE. You need a Numero de Identificacion de Extranjero to buy and to borrow. See our NIE and Spanish bank account guide.
2. Open a Spanish bank account for the mortgage, direct debits and utility bills.
3. Get a decision in principle from one or more banks (or use a mortgage broker) before committing.
4. Reserve the property and sign the private purchase contract, ideally subject to mortgage approval.
5. Bank valuation and full offer. The bank sends a surveyor and issues a binding offer (FEIN/FiPre) with a mandatory reflection period.
6. Complete at the notary, signing the title deed (escritura) and mortgage deed together, then register at the Land Registry.

Allow roughly four to five months from offer to completion as a non-resident.¹ Instruct an independent Spanish lawyer (not one recommended by the seller) and expect the whole process to take longer than a UK purchase.

A note on residency and visas

Buying property no longer grants residency. Spain abolished its “Golden Visa” investor route in April 2025, so a property purchase does not create a right to live in Spain. As a UK citizen you can visit under the Schengen 90-days-in-180 rule; longer stays require a separate visa such as the non-lucrative or digital-nomad visa. Our residency and visas guide covers the current options. Buying with a mortgage and buying for residency are two separate decisions.