Your guide to mortgage costs in Spain

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When you take out a mortgage in Spain, there are associated fees. But who pays these, the bank or you, the buyer? Find out in this guide. 

Mortgage applications involve a number of fees, attributable to the lender or the borrower (or both). In this article, we list mortgage costs in Spain and explain who is liable for their payment in each case.

It’s worth pointing out that who pays for which fees, bank or buyer, has been the subject of numerous cases in both Spanish court and the European Court of Justice (ECJ) over the last few years. However, the Spanish Supreme Court sentence in late 2021 established exactly which costs correspond to which party.

As a result, the situation is clearer as follows:

Valuation fees – bank pays

The Supreme Court sentence has ruled that the lender must pay for a mortgage valuation in Spain. However, in practice, we are finding that a considerable number of mainstream lenders still charge this fee. It is worth noting that a valuation can always be carried out by an independent professional outside the bank’s preferred valuation panel of providers.

Notary fees – bank and buyer pay

Of all mortgage costs in Spain, this is the only one split equally between the two parties. The lender must pay 50% of the fees for the mortgage title deeds and you, the buyer, the remaining 50%. 

Note, however, that in practice, after mortgage regulation came into force in June 2019, virtually all lenders as a concession now pay 100% of the notary costs pertaining to the mortgage title deeds.

Note that you’re liable for the costs of the title deeds pertaining to the property you buy.

Property Registry fees – bank pays

In this case, too, the lender is liable for all fees associated with registering the mortgage at the Property Registry. Note, however, that you, the buyer, must pay for the costs associated with registering the property in your name at the Property Registry.

Mortgage paperwork fees – bank pays

Again, the lender must meet the costs for the paperwork involved with a mortgage application and registration.

Stamp duty on mortgages – bank pays

The tax associated with a mortgage, known as AJD in Spanish (Actos Jurídicos Documentados), is paid by the lender since the June 2019 mortgage regulations came into effect. It is levied on the amount borrowed and the percentage varies in the different regions of Spain. ADJ ranges from 0.4% in the Canary Islands to 1.5% in most parts of Spain. 

Mortgage opening fee – bank or buyer pays

In the past, the buyer paid for this cost, but recent sentences may change this situation. In mid-2020, the ECJ ruled that the fee should not be passed onto the buyer because it is not an essential part of the loan.

However, the Spanish Supreme Court has since chosen to stick to its own ruling in 2019 that the buyer should pay. To complicate things further, several Spanish courts have since ruled in favour of buyers.It should be noted that while some lenders do not charge this fee, most still do, however.

One of the advantages of working with us at Mortgage Direct is that we have a strong relationship with banks and are able to secure better rates for our clients. Our services also include securing the lowest possible fees associated with your mortgage. 

Mortgage broker fees – buyer pays

These usually consist of an initial consultation fee plus a percentage of the amount borrowed. For example, for a mortgage loan of €150,000 to buy a property valued at €300,000, you could expect to pay around €1,695 inclusive of IVA in mortgage broker fees. 

Mortgage Direct operates a money back guarantee scheme for its clients whereby if an initial approval cannot be obtained for the buyer the costs of the broker fee are refunded.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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