The mortgage market in Spain has opened up considerably in recent years and now all banks generally offer mortgage facilities to both clients and non-clients, although obviously clients receive more favorable terms. In order to obtain a mortgage from a bank in Spain you must be over 25 and have a fixed employment contract or have been self-employed for at least 3 years.

Residents can theoretically borrow up to 90% of the value of the property, although the amount is usually nearer 70 or 80% and the actual amount lent will depend on your income. Non-residents can usually only borrow up to around 70% but again this depends on the lender and your financial status. Note that not all banks will lend to non-residents. Mortgages are generally available for up to 25 years, although shorter terms are also common.

There are considerable differences between mortgages in Spain and mortgages in the UK. The UK mortgage system is based on income multiples (i.e. 3 x your gross income), whereas banks in Spain assess your application based on your ability to repay the loan (and not potential rental income from the property). Most Spanish banks lend on the basis that your total monthly repayments (capital and interest) should not exceed 35% of your net monthly disposable income.

If you are self-employed income is assessed as the average of the last three years' net income. Rental & investment income may also be considered. If employed a lender will base your income normally on your last 3 pay slips and the amount that is paid into your account on a monthly basis.

The cost associated with the purchase of a resale property is approximately 10% of its value. The cost associated with new-build property is approximately 12.5%.

The normal time it takes for your mortgage application to be proceeds is between five and seven weeks although this will vary from bank to bank.

The basic documents that are required to verify your income if you are employed:

- A copy of your last P60
- Copies of your last 3 pay slips
- A copy of your Inland Revenue Tax form

The basic documents that are required if you are self-employed:

- Copies of the last three years’ annual accounts
- Copies of the last three years’ Income Tax Calculations issued by the Inland Revenue
- Copies of the last three months bank statements

There are many options now available in relation to mortgages and leading in Spain and this is one of the reasons the Spanish Mortgage Directory was set up. If you are on good terms with the bank manager, you may be able to negotiate your own terms and conditions for the mortgage.

Shop around for your mortgage because each bank offers different rates and conditions. Also, don't accept the first offer. Once you have your first mortgage offer - take it to a different bank to see if they can improve the offer – in many cases they will, especially due to the increase in competition for this ever-expanding market. You can then even take the improved offer back to the original bank.