Mortgage Types: BTL or Normal?

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This topic contains 8 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 3 years, 1 month ago.

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  • #57832
    Profile photo of Anonymous
    Anonymous
    Participant

    Hi all!

    I would like some advice about mortgage applications. I am currently living and working in Spain. So I have an NIE and I’m living in rental accommodation. But I’m considering buying a property to rent out. Would I need to specifically apply for a BTL mortgage or could I just apply for a normal mortgage? Would there be a difference is their willingness to lend and the amount they would be willing to lend?

    Thanks in advance!

  • #118537
    Profile photo of Anonymous
    Anonymous
    Participant

    oh, the banks will be be shaking with glee to lend to you πŸ˜† πŸ˜† πŸ˜† !! the sky is your limit πŸ˜‰ πŸ˜‰ πŸ˜‰ !!!!!

  • #118547
    Profile photo of katy
    katy
    Spectator

    Buy to let mortgages…it’s not the UK you know :mrgreen:

  • #118550
    Profile photo of Anonymous
    Anonymous
    Participant

    Mmm thanks for the considered responses. Very helpful. I know this is not the UK. But is there any reason they wouldn’t have BTL mortgages here? I’m clearly asking questions because I don’t know…

  • #118552
    Profile photo of Anonymous
    Anonymous
    Participant

    Curious,

    For the time being, Spanish banks don’t want to lend, and certainly not on the strength of expected rental income.

    To get a mortgage in Spain today your own funds have to cover at least 50pc of the total cost of the purchase, and your debt ratio has to be around 30pc. You might be able to do better than that if you buy a bank repo.

    Banks will not consider expected rental income in the mortgage assessment, so BTL mortgages don’t exist.

    Mark

  • #118551
    Profile photo of Chopera
    Chopera
    Participant

    @curioustoknow wrote:

    Hi all!

    I would like some advice about mortgage applications. I am currently living and working in Spain. So I have an NIE and I’m living in rental accommodation. But I’m considering buying a property to rent out. Would I need to specifically apply for a BTL mortgage or could I just apply for a normal mortgage? Would there be a difference is their willingness to lend and the amount they would be willing to lend?

    Thanks in advance!

    As mentioned, BTL mortgages (i.e. based on rental income rather than your income) don’t exist in Spain, but on the other hand the banks don’t seem to have a problem with people renting out property that has a “residential” mortgage. In my experience some banks will still finance their properties up to 100% provided your total mortgage payments remain below 40% of your income, but this is unusual. Usually they want you to put down 40%.

  • #118562
    Profile photo of Chopera
    Chopera
    Participant

    @katy wrote:

    Buy to let mortgages…it’s not the UK you know :mrgreen:

    That might be why they asked the question πŸ™„

  • #118564
    Profile photo of Anonymous
    Anonymous
    Participant
    Quote:

    but on the other hand the banks don’t seem to have a problem with people renting out property that has a “residential” mortgage πŸ˜† πŸ˜† πŸ˜† πŸ˜† πŸ˜†

    ΒΏreally? I’d ask if i were you!! πŸ™„ πŸ™„ also, ask the insurance co?? don’t be an ostrich in Spain, rules apply here as well πŸ™„ πŸ™„ πŸ™„ πŸ™„

  • #118578
    Profile photo of Anonymous
    Anonymous
    Participant

    OK, many thanks for getting back to me.

    Regarding the willingness of the banks to lend, I was under the impression that as you say, they are not keen and would demand a large deposit. But in one informal and another more formal conversation, the mortgage person at Sabadell never gave me any impression there would be a problem lending me up to 80%. Sure he did steer me towards buying a Solvia property and urged patience rather than rushing into anything. But I can’t see why they would suggest it won’t be a problem now, if in fact it will be when I do find a property.

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