How much can you borrow to buy a home in Spain?

A Spanish bank sets the size of your loan using three limits. The first concerns your income: the monthly payment must not take too large a share of it. The second concerns the property: the bank finances only part of its price. The third concerns time: the loan term depends on your age. The amount you get is the lowest of the three.

First limit: the share of your income

The bank adds up the monthly payment on the future loan and the repayments on your existing credit, then compares that total with your net monthly income. This ratio is the debt-to-income ratio (in Spanish, ratio de endeudamiento).

Spanish law sets no figure for it. It requires the bank to assess your creditworthiness before lending, and each bank applies its own criteria. The affordability rules your home lender applies, such as a cap on the share of income or on the multiple of your salary, do not apply to a Spanish mortgage. Do not carry them over to your Spanish budget: Spanish banks calculate on your net income and also look at how much you have left to live on once the monthly payment is made.

What goes into the calculation

• your net salary, pension or self-employed income, averaged over a period the bank considers stable;
• your rental income, which some banks count only in part;
• all your current monthly repayments: mortgage, car loan, personal loan;
• your rent, if you remain a tenant in your home country.

List every commitment, even a small one: the bank sees them on the bank statements you hand over.

If you earn in pounds, dollars or another currency, the bank weighs that income against a payment set in euros, so the exchange rate on the day of the assessment also shapes the result.

Second limit: the share of the price financed

The bank finances only part of the price, calculated on the lower of the purchase price and the valuation (tasación):

• up to 80-90% if you are tax resident in Spain;
• up to 75% if you are a non-resident;
• up to 50% over 15 years for a purchase through a company.

Your own funds must cover the rest of the price and all the buying costs, which banks do not usually finance. With €100,000 of your own money, of which €30,000 goes on costs, you have €70,000 left for the price. At a 70% loan-to-value, you can aim for a property of around €233,000. Your income then has to cover the repayment of a loan of €163,000.

Third limit: the term

The longer the loan, the lower the monthly payment and the more you can borrow. Banks cap the term and set a maximum age at the final repayment, so a 55-year-old borrower will not get the same term as a 35-year-old. These caps vary from one bank to another. For a company, the term usually drops to 15 years.

A full example

A couple lives in Ireland. Net income: €6,000 a month. Current car loan: €300 a month. They are looking at a 25-year loan.

First limit: the bank takes the share of their income it is willing to see go on repayments, minus their current car loan. With €6,000 of net income a month, this limit lets them borrow well beyond what their own funds allow. Had they been paid in pounds or dollars, the same calculation would run on their income converted into euros.

Second limit: with €100,000 of own funds, of which about €30,000 goes on costs, and a 70% loan-to-value, their loan tops out at around €163,000, as calculated above. Their budget therefore depends on their own funds.

The reverse case also happens: a buyer with a large cash contribution and a modest income hits the first limit. The simulator calculates all three limits from your situation in 3 minutes and sends you a detailed PDF.

How to borrow a little more

• Pay off a small loan before you submit your file: every euro of monthly repayment you clear goes back into the share of your income available for the mortgage.
• Extend the term if your age allows it.
• Borrow jointly: both incomes are added together.
• Prove that your self-employed income is stable with several years of accounts.
• Pick the right bank: criteria differ, especially for non-residents and for income in a currency other than the euro.

Official sources

• Law 5/2019 of 15 March on real estate credit agreements (BOE): article 11 (assessment of the borrower's creditworthiness, with no numerical cap).
• Order EHA/2899/2011 on transparency and customer protection in banking services (BOE): article 18 (responsible lending: the bank assesses income, assets, savings, debts and fixed expenses, without a numerical ratio).