Short answer: a non-resident buyer can obtain a mortgage in Spain, normally for a lower percentage of value than a resident and on a longer timetable. Law 5/2019 protects you considerably more than most foreign buyers realise: the lender must provide all documentation ten calendar days before signing, the notary advises you free of charge before you sign, the lender bears the notary, registry, agency and stamp duty on the loan deed, and if you earn in kronor while the loan is in euros you have the right to request a currency conversion. What the law will not do is protect you from having signed an arras contract with a deadline that cannot be met.
For thirteen years we acted as attorneys for Svenska Handelsbanken in mortgage transactions in the Valencian Community and Murcia. From that side of the file you see clearly what is almost never explained to the buyer: most transactions that collapse do not collapse because the bank says no, but because the timetable agreed in the arras contract was never compatible with the one the law requires.
Contents
- What Law 5/2019 changed and why it protects you
- How much you will actually be lent
- The real timetable: why thirty days is not enough
- The documents you will be asked for
- The valuation: the document that decides the figure
- The ten days and the prior notarial deed
- Who pays what since 2019
- Clauses the law already limits or prohibits
- If you earn in kronor and borrow in euros
- If you buy through a company, the law protects you less
- The link to the arras contract
- Red flags
- Frequently asked questions
- Legal sources
What Law 5/2019 changed and why it protects you
Law 5/2019 of 15 March on real estate credit agreements transposed Directive 2014/17/EU and completely rewrote the pre-signature stage of a Spanish mortgage. It is borrower-protection legislation and, for present purposes, the rights it grants cannot be waived by agreement.
The essential point for a foreign buyer is that the law shifted a large part of the costs to the bank and a large part of the control to the notary. You no longer sign a mortgage on the day it is put in front of you: there is a procedure with fixed deadlines, and that procedure takes time.
It applies to natural persons — borrowers, sureties and guarantors — in loans secured by mortgage over residential property. Being non-resident does not exclude you: if you buy a Spanish home as an individual with a mortgage, the law protects you exactly as it protects a Spaniard.
How much you will actually be lent
One point deserves to be clear: no law fixes the loan-to-value percentage. It is each lender’s risk policy, it varies between banks and it varies with the cycle. Anyone who gives you a figure as though it were a legal rule is misinforming you.
That said, Spanish market practice is fairly stable and worth knowing. A resident is frequently lent up to 80% of the lower of purchase price and valuation. For a non-resident the usual percentage is notably lower, frequently between 60% and 70% of that same reference. The difference reflects risk perception: less ability to monitor the borrower, greater difficulty of enforcement and no Spanish credit history.
Three practical consequences worth carrying from the outset:
The first is that the real own contribution is larger than many calculate. If you are lent 65% of value, you need the remaining 35% plus the costs and taxes of the purchase, which in the Valencian Community come to around 11% or 12% of the price with a mortgage. On a €300,000 property that means roughly €105,000 of deposit plus some €34,000 of costs.
The second is that the bank assesses your capacity to pay on your real income, documented in your home country, on the basis that the instalment must not absorb an excessive share of your net income. Future rental income from the Spanish property itself is usually not counted, or is counted with heavy discounts.
The third is that the amount is calculated on the lower of price and valuation. If the valuation comes in below the agreed price — common where there are surface discrepancies or unregistered structures — the loan drops and you make up the difference. It is one reason to check the consistency between Registry, Cadastre and physical reality before signing arras: we explain it in Land Registry vs Cadastre in Spain.
The real timetable: why thirty days is not enough
This is where most transactions break, and it is pure arithmetic. Add up the stages of a normal non-resident file:
- Obtaining the NIE, if you do not have one: from days to several weeks depending on consulate or police station.
- Opening a Spanish bank account and evidencing the source of funds.
- Gathering documentation in your home country, with Apostille and sworn translation where required.
- The lender’s credit assessment.
- Valuation by an approved appraisal company: instruction, visit and report.
- Approval and issue of the FEIN, the binding offer.
- Ten calendar days of statutory minimum notice before signing is possible.
- The visit to the notary for the prior deed, which must precede the loan deed.
- Coordinating the completion date between notary, bank, seller and buyer.
In a clean transaction, with all documentation available from day one, this rarely comes in under six to eight weeks. With a NIE outstanding, or a registry discrepancy the bank wants resolved first, three months is reached without difficulty.
An arras contract with a thirty-day deadline to complete is, in these conditions, a trap. And it is not a theoretical trap: it is the most frequent cause of forfeited deposits among the foreign buyers we have seen at the office.
The documents you will be asked for
It varies between lenders, but the core is always the same.
Identification: valid passport and NIE. Without a NIE there is no deed and no tax settlement.
Evidence of income: if employed, recent payslips and employment contract; if self-employed or a business owner, annual accounts and tax returns for the last two or three years in your country.
Tax returns from your country of residence. For a Swedish taxpayer, the inkomstdeklaration; for a Norwegian, the skattemelding; for a British taxpayer, the self assessment or P60s.
Credit report from your home country, where one exists and the lender requires it, or an equivalent bank reference.
Bank statements for recent months and documented evidence of the source of the funds you will contribute. That last point is not a minor formality: anti-money-laundering rules bind both the bank and the notary, and an international transfer without evidenced traceability can sit blocked for days.
A list of outstanding debts and loans in your country.
A certificate of tax residence, frequently requested.
One detail that surprises many clients: foreign public documents may require a Hague Apostille and a sworn translation into Spanish. That takes time and is arranged in your home country, not here. Start there; do not leave it to the end.
The valuation: the document that decides the figure
The valuation must be carried out by an approved, independent appraisal company under article 13 of Law 5/2019 and the applicable valuation rules. The cost falls on the borrower: it is the only significant item of the formalisation that the law allocates to you.
Two things worth knowing. First, the valuation has limited validity, so if the transaction drags on it may need repeating. Second, and more importantly, the valuer measures what exists. If the property has 214 m² built and the registered description says 180 m², the report will record that discrepancy and the lender may require it to be regularised before granting the loan. That is the moment a buyer discovers, with the deposit already paid, that a declaration of new construction is needed that nobody had allowed for.
The ten days and the prior notarial deed
This is the law’s central protective mechanism, and the one that most disconcerts foreign buyers because it has no equivalent at home.
Under article 14.1 of Law 5/2019, the lender must make available to you, at least ten calendar days before signing, a documentary package including the European Standardised Information Sheet (FEIN), which constitutes a binding offer; the Standardised Warnings Sheet (FiAE), highlighting the most sensitive clauses; for variable-rate loans, a document with instalment simulations under different rate scenarios; a copy of the draft contract with all costs itemised; and clear information on which costs fall on each party.
Then, under article 15, you must attend the notary of your choice for the prior notarial deed. The notary verifies that the deadlines have been met, explains the FEIN and FiAE clauses to you individually, answers your questions and records all of it in the deed. That visit is free for you, and without a favourable deed the loan cannot be formalised.
Use it. It is the only occasion in the whole process when an independent public official, paid neither by you nor by the bank for that act, is obliged to explain what you are about to sign. And if your Spanish is not sufficient, you are entitled to an interpreter: arrange it in advance, not on the day.
The FEIN has a statutory validity of ten calendar days, although in practice lenders usually offer longer. If it lapses without extension, the process goes back a step.
Who pays what since 2019
This allocation is set out in article 14.1.e) of Law 5/2019 and cannot be varied by agreement:
- Valuation: borrower.
- Agency (gestoría): lender.
- Notarial fees for the loan deed: lender.
- Copies of the deed: whoever requests them.
- Registration of the mortgage at the Land Registry: lender.
To that is added the stamp duty (AJD) on the mortgage loan deed, for which the lender has been the taxpayer since the reform of late 2018. The bank pays it, it is calculated on the total secured liability, and in the Valencian Community the general rate is 1.40% since 1 June 2026 under Law 5/2025.
Do not confuse the two: the AJD on the mortgage is paid by the bank, but any AJD on your purchase deed — on a new-build, for example — is paid by you. They are two separate settlements. The detail of purchase costs is in what it really costs to buy a property in Spain.
An arrangement fee is legitimate, but article 14.4 requires it to be charged once only and to cover all costs of assessment, processing and granting. The bank cannot charge you an arrangement fee and separate “study costs” on top.
Clauses the law already limits or prohibits
A foreign buyer rarely knows that much of what they fear is now legally constrained.
Floor clauses: prohibited. Article 21 prevents a variable-rate loan from setting a lower limit on the interest rate. The rate cannot go negative, but no agreed floor is permitted.
Default interest: fixed by statute. Article 25 sets it at the remuneratory rate plus three percentage points, with no scope for a different agreement.
Acceleration for non-payment: tightened in your favour. Article 24 requires, in addition to a prior demand with at least one month to comply, that arrears reach thresholds far above the former ones: in the first half of the loan’s life, 3% of the capital granted or twelve monthly instalments; in the second half, 7% or fifteen instalments. It cannot be varied by agreement.
Early repayment: your right, with capped compensation. Article 23 gives you the right to repay in whole or in part at any time, subject to an agreed notice period of no more than one month. Compensation to the bank is capped: on variable rates, either 0.25% during the first three years or 0.15% during the first five, depending on what was agreed, and nothing thereafter; on fixed rates, up to 2% during the first ten years and 1.5% after. In no case may compensation exceed the lender’s actual financial loss.
This last point matters particularly to the Nordic buyer who plans to sell within a few years, or to repay when a property back home is sold. Calculate the real cost of exit before choosing between fixed and variable.
Tied sales: prohibited as a general rule. Article 17 prohibits making the loan conditional on taking out other products, with limited exceptions including damage insurance on the property. The bank may offer combined packages — a lower rate if you take out insurance or transfer your salary — but it must also offer the alternative without them, and you are entitled to compare. A bank cannot force you to take its life insurance: it can require you to have insurance, not to buy it there.
If you earn in kronor and borrow in euros
This is the part almost never explained to Nordic clients, and potentially the most valuable to them financially.
Article 4.27 of Law 5/2019 defines a “loan denominated in foreign currency” as one denominated in a currency other than that of the Member State where the borrower resides, or other than the one in which the borrower holds the assets or receives the income with which the loan is to be repaid.
Read that “or” again. A resident of Sweden receiving income in kronor who signs a loan in euros falls within the definition: the loan is denominated in a currency other than that of their state of residence and other than that of their income. The Instruction of the Directorate General of Registries and Notaries of 20 December 2019 confirms this reading and clarifies that it is enough for the majority of assets or income to be denominated in a different currency, as established by the lender’s solvency assessment at formalisation.
The consequence is the right under article 20: the borrower may request conversion of the loan into an alternative currency, being the currency in which they receive most of their income or hold most of their assets, or that of their Member State of residence. The lender is also obliged to inform you periodically whenever the amount owed or the instalments diverge by more than 20% from what they would have been at the exchange rate in force when the contract was made.
Three qualifications are worth stating, because this ground has edges. The first is that this is a regime the lender must determine at formalisation, based on its solvency assessment: that is the moment it must be raised expressly, which is why it should be discussed with the bank and the notary before signing, not after. The second is that a later change of address does not in itself create a fresh conversion right if it was not provided for from the outset. The third is that the analysis differs somewhat for a resident of a non-EU country, although the same outcome can often be reached via the income and assets limb.
Aside from the legal mechanics, the economic risk is real and deserves its own calculation: if your income is in kronor and your instalment in euros, a depreciation of the krona makes your mortgage more expensive every month even if Euribor does not move. It is a factor that belongs in the decision, not one to discover three years later.
If you buy through a company, the law protects you less
This deserves an express warning, because many buyers make the decision for tax reasons without knowing its legal price.
Law 5/2019 does not apply to a borrower that is a legal person, even one qualifying as a consumer. There is no compulsory prior notarial deed, and the substantive limits of articles 20, 21, 23, 24 and 25 — currency, floor clauses, early repayment, acceleration and default interest — do not operate in your favour. They do apply in full, however, to any natural person acting as surety or guarantor of the loan, who must be informed of the entire set of terms.
Buying through a company may therefore make sense for tax or succession purposes, but it costs you an entire body of mortgage protection. Make the decision with both calculations done, not just one.
The link to the arras contract
If you take one idea from this article, let it be this: the protection of Law 5/2019 is worth nothing to you if the problem lies in the contract you signed earlier.
Refusal of the mortgage does not by itself release you from the purchase. If the arras contract contains no properly drafted financing condition, the risk of obtaining the loan is yours, and losing the sum paid is the normal outcome. A condition that works identifies the lender or lenders to be approached, the minimum loan amount needed, the period for obtaining a decision and how the refusal is to be evidenced. And the completion deadline must be compatible with the real timetable described above, not with whatever suits the agency.
We develop this, with the fifteen pre-signature checks, in the arras contract in Spain.
Red flags
- You are asked to sign arras with a thirty-day deadline and you have neither a NIE nor a mortgage application under way.
- The arras contract says nothing about what happens if the bank declines.
- You are presented with the loan deed without having received the FEIN and FiAE ten days beforehand.
- It is suggested that the notary visit for the prior deed can be skipped or done on the day of signing.
- The bank passes on notary, registry, agency costs or the AJD on the mortgage.
- You are required to take life insurance with the lender as a condition of the loan.
- The valuation reveals a surface discrepancy and nobody explains who will regularise it or by when.
- You are offered a rate discount without the annual cost of the tied products being quantified.
- Nobody has mentioned exchange rate risk and your income is in kronor.
- The estate agency “handles” your mortgage and gives you no comparison with any other lender.
Frequently asked questions
Can a non-resident get a mortgage in Spain?
Yes. Spanish banks lend to non-residents routinely. The difference from a resident lies not in access but in the loan-to-value percentage, usually lower, and in the documentation, which must be evidenced from the home country.
How much will Spanish banks lend to a non-resident?
There is no statutory percentage. Market practice frequently sits between 60% and 70% of the lower of purchase price and valuation, against up to 80% commonly available to residents. It varies by lender, income profile and property type.
How long does a non-resident mortgage take in Spain?
In a transaction without complications, rarely less than six to eight weeks from application, and frequently longer. Add obtaining the NIE if you do not have one, documentation with Apostille and sworn translation, the credit assessment, the valuation, the statutory minimum of ten calendar days before signing, and the notary visit for the prior deed.
What are the ten days under Law 5/2019?
The lender must make the FEIN, the FiAE, the draft contract and the cost information available to the borrower at least ten calendar days before signing, under article 14.1. Within that period the borrower must attend the notary for the prior notarial deed, which is free of charge and without which the loan cannot be formalised.
Who pays the mortgage costs in Spain?
Since Law 5/2019 the lender bears the agency costs, the notarial fees for the loan deed and the registration of the mortgage, as well as the stamp duty (AJD) on the mortgage. The borrower pays the valuation and any copies requested.
What happens if the bank refuses the mortgage after I have signed arras?
It depends on the contract. If it contains a well-drafted financing condition, the buyer recovers the sum paid on the agreed terms. If it does not, the refusal does not excuse them: the risk of obtaining finance is, as a general rule, the buyer’s.
Can I repay early, and what will it cost?
Article 23 of Law 5/2019 grants the right to repay in whole or in part at any time. Compensation is capped: on variable rates, 0.25% during the first three years or 0.15% during the first five depending on what was agreed, and nothing thereafter; on fixed rates, up to 2% during the first ten years and 1.5% after, never exceeding the lender’s actual financial loss.
I earn in Swedish kronor: can I convert the mortgage?
Article 4.27 of Law 5/2019 treats as a foreign-currency loan one denominated in a currency other than that of the borrower’s Member State of residence or other than that in which they receive the income to repay it. Article 20 then grants the right to request conversion into the currency of their income or of their state of residence. The lender determines this regime at formalisation on the basis of the solvency assessment, so it must be raised before signing.
Does the law protect me if I buy through a company?
Not on the same terms. Law 5/2019 does not apply to a borrower that is a legal person, even a consumer one, so there is no compulsory prior deed and the limits on currency, floor clauses, early repayment, acceleration and default interest do not operate. They do apply to any natural person acting as surety or guarantor.
Legal sources
- Law 5/2019 of 15 March on real estate credit agreements: articles 2, 4.27, 13, 14, 15, 17, 20, 21, 23, 24 and 25 (BOE).
- Directive 2014/17/EU of the European Parliament and of the Council on credit agreements for consumers relating to residential immovable property (OJEU).
- Instruction of 20 December 2019 of the Directorate General of Registries and Notaries on questions arising in the application of Law 5/2019 (BOE).
- Royal Decree-Law 17/2018 of 8 November, amending the consolidated Transfer Tax and Stamp Duty Act: taxpayer for AJD on mortgage loans (BOE).
- Law 5/2025 of 30 May of the Generalitat: general AJD rate of 1.40% since 1 June 2026 (DOGV).
- Law 2/1981 of 25 March on the mortgage market, and the valuation rules applicable to approved appraisal companies (BOE).
- Bank of Spain, Bank Customer Portal: information on mortgage loans.
Our experience in mortgage transactions
For thirteen years we acted as attorneys for Svenska Handelsbanken in mortgage transactions in the Valencian Community and Murcia. We review the FEIN and the draft loan deed before signature, check the allocation of costs, verify that the arras contract timetable is realistic, and accompany the client to both the prior notarial deed and completion. We work in English, Swedish, Norwegian, Danish and Spanish.
Read more about our property purchase service or run your figures with our free tools: buying costs and plusvalía municipal.
Colás Abogados / Advokater — Hugo Gutiérrez Colás, Lawyer no. 6.539 ICALI
Calle Mozart 9, 03581 Alfaz del Pi (Alicante)
Email: [email protected]
Telephone: +34 629 549 430
Web: www.colas-abogados.com
Author: Hugo Gutiérrez Colás, Lawyer no. 6.539 of the Alicante Bar Association. Published 3 September 2026. Last legal review: 3 September 2026.
This article is informative in nature and does not constitute legal or financial advice on a specific case. The loan-to-value percentages quoted reflect ordinary market practice, not legal rules, and vary by lender and applicant profile.