Hipoteca
A hipoteca is a mortgage loan secured against a property in Spain. When you buy a property with bank financing, the bank takes a charge (hipoteca) on the property. If you stop paying, the bank can repossess the property. The hipoteca is registered on the escritura and inscribed in the Registro de la Propiedad, which is why it appears on the nota simple.
Types of hipoteca
Spanish banks offer three main types. A hipoteca fija has a fixed interest rate for the entire loan term, giving you predictable monthly payments. A hipoteca variable has a rate that adjusts periodically (typically every 6 or 12 months) based on the Euribor index plus a margin. A hipoteca mixta has a fixed rate for an initial period (typically 5 to 10 years) and then switches to variable.
Non resident mortgages
Spanish banks lend to non residents, but the terms are typically less generous. Expect a maximum loan to value (LTV) of 60% to 70% compared to 80% for residents. Interest rates may be slightly higher. You will need proof of income from your home country, tax returns, and a credit report. The process takes longer because the bank must verify foreign documentation.
The FEIN document
Before signing your mortgage, the bank must provide a FEIN (Ficha Europea de Información Normalizada), a standardised European document that details all the loan terms: amount, rate, total cost, monthly payment, and any binding conditions. You must receive it at least 10 days before the notarial signing. This cooling off period was introduced by the Ley Hipotecaria of 2019 to protect borrowers.
Costs
The bank pays the mortgage tax (AJD) and most arrangement costs under the 2019 law. The buyer pays the property valuation (tasación, typically 300 to 500 euro) and their own legal representation if desired. Early repayment fees are capped by law: 0.25% during the first three years for variable rate mortgages and 2% during the first 10 years for fixed rate mortgages.
