In the last few years the cost of arranging a Spanish Mortgage have dropped considerably. Since regulation of 2019 there have been a number of changes.

Mortgage deed tax

The key saving is on what was known as mortgage deed tax. This is a local government tax which is payable on inception of all new loans. Whilst varying slightly from region to region. On average the mortgage deed tax worked out at 1.8% of the loan level. Since 2019 the Spanish Lenders have been obligated to pick up this cost. They can no longer pass it on to the Spanish mortgage applicant. This rule applies for all regulated lenders. Non regulated lenders like bridging finance or private lenders are not obliged to cover the tax and will nearly always pass this cost onto the borrower.

Notary and Land registry costs

The other cost regulated lenders must now pick up is the Notary and land registry costs relating to the mortgage deed. If you contract a mortgage in Spain you will have two deeds. The purchase deed and the mortgage deed. Borrowers are still required to pick up the costs related to the purchase deed. All lenders will have a bank arrangement fee payable at completion. This will range from 0.50% of lending approved to 2%. On average most lenders charge 1.5%. One lender has a 0% opening fee but this is linked to contracting a number of products from them. Including an alarm system, life cover and household insurance.

Valuation fees

Borrowers are also required to pay for the valuation fee. On average this works out to 0.10% of the purchase price but minimum fees apply. Minimum valuation fees are normally around 300 euros. If an applicant wishes to instruct their own valuation it needs to be one for mortgage purposes. Undertaken by a Bank of Spain registered evaluation company. You can pay direct to the valuation company. If it is less than 6 months old the lender is obliged to allow the borrower to use this valuation. However it is required that the valuation gets changed from the instructed name to the Banks name and small administration fees may apply.

Independent broker fees

On top of the Spanish Banks costs. If you wish to contract the services of an independent mortgage broker. To ensure you get access to all Banks and products. You will have the cost of a consultancy fee. Brokers fees in Spain range from a set fee to a percentage of the loan size. Some will charge upfront, but the better brokers will only charge the fee when the mortgage application has been underwritten, and the borrower has decided to proceed.