Against your UK
property.
The mortgage will usually be in Sterling.
Against the Spanish
property.
Here the mortgage will be in Euros.
Interest rates
vary, and of course if you borrow in Sterling
you run the risk that the Euro
may strengthen against the pound,
and you lose out. Of course, the opposite
may happen too.
If you are going
to let the property, you are unlikely to
get tax relief in Spain on a UK mortgage.
The main differences
between an English and Spanish mortgage
Most Spanish mortgages
are usually granted for up to 15
years,
not 25 as in England. However, competition
between lenders has meant that mortgages
of a longer duration are now obtainable
if you shop around. Normally, the mortgage
must have been repaid by your
70th birthday.
There are often restrictions
or penalties for early payment of the loan
(usually
1%).
The loan will be in Euros.
The maximum loan is generally
60-75%
of the value of the property.
Most Spanish banks are not allowed to lend
you more than
30-33%
of your net disposable income.
Spanish mortgages have high set-up costs
(2-3%)
but benefit from a lower Eurozone
interest rate.
Tax
Note that
it more tax efficient to have a property
(and mortgage)
in joint names. Remember though that you
cannot transfer ownership between spouses
without liability to tax (unlike
in the UK).
See the Buying
a Property
and Residency
& Tax
sections for more information.
Source: BlevinsFranks
See also
Buying
a Property
Residency
& Tax
Services
Directory: Legal, Financial & Professional
Services |
