A Spanish mortgage as a non-resident: what the law protects before you sign

The bank's offer reaches a couple in Manchester on a Monday: a loan for 65 per cent of the valuation, the bank's own insurance policy, and a signing date in Costa Adeje the following Tuesday, because their flight home is on the Wednesday. The first of those is the bank's decision. The other two run into a Spanish Act that protects anyone who mortgages a home here, wherever they live. This note explains what that Act gives a buyer from abroad before the signature: the papers and the ten days, the free session with a notary, who pays which cost, why a loan in euros can legally be a «foreign-currency loan», and what the bank may and may not attach to it.

The same Act, wherever you live

The rules are in Ley 5/2019, the Act on real-estate credit contracts, in force since 16 June 2019. It applies when a professional lender grants a loan secured by a mortgage on a residential property and the borrower, a surety or a guarantor is a natural person (article 2). Nothing in that definition asks where the borrower lives or what passport they hold: a resident of Leeds, Zurich or Stockholm who mortgages a flat in Tenerife is inside it.

Its protections cannot be signed away. The Act calls its rules mandatory and declares void la renuncia previa de los derechos que esta Ley reconoce al deudor, fiador, garante o hipotecante no deudor, the prior waiver of the rights this Act gives the debtor, the surety, the guarantor or a mortgagor who is not the debtor (article 3).

What does change for a non-resident is the bank's own credit policy. The Act obliges the lender to assess in depth whether you can repay, looking at employment, present and foreseeable income, assets, savings, fixed expenses and existing commitments, and forbids it to rest that assessment mainly on the property being worth more than the loan, or on the hope that it will rise in value (article 11). It may ask only for information that is proportionate and necessary, it must tell you which documents it needs and by when, and if you choose not to supply them the loan cannot be granted (article 12). For someone paid abroad, that means proving income and debts with documents from another country. A refusal has to reach you in writing, without delay and with its reasons. And once the loan is granted, the bank cannot cancel or change it later because its own assessment was wrong, unless it proves that you knowingly hid or falsified information, nor because what you supplied was incomplete (article 11).

How much the bank lends is also its decision. The Act does not say how much a bank may lend, to a resident or to anyone else. Spanish law does contain an 80 per cent line, but it is the share of the appraisal value up to which a residential loan may back a bank's mortgage bonds (Real Decreto-ley 24/2021, article 23), not a limit on what it may lend. In practice banks offer non-residents less than residents, commonly between 60 and 70 per cent of the appraisal value, and each sets its own figure.

Ten days, and the papers that start them

Before you are bound by anything, the lender must hand over a set of documents con una antelación mínima de diez días naturales respecto al momento de la firma del contrato, at least ten calendar days before the moment the contract is signed (article 14). Calendar days, not working days, and they are counted from the day the papers reach you, not from the day the loan was approved.

The FEIN is the one to compare between banks. The Act makes it an oferta vinculante para la entidad durante el plazo pactado hasta la firma del contrato que, como mínimo, deberá de ser de diez días, an offer that binds the bank for the agreed period up to the signing, which must be at least ten days. The bank must also answer your questions about what the papers mean, with worked examples.

A buyer who flies in for a week cannot compress this. If the papers arrive on a Monday, the signing cannot be before the Thursday of the following week. Ask the bank to deliver them before you travel: the ten days run just as well while you are at home.

The ten days also bear on the purchase contract. A deposit agreement signed before the bank's offer is binding puts the deposit at risk if the loan is refused or arrives late; the clause that makes the purchase conditional on the loan has to be written into it, as our note on the arras contract explains.

The notary's session: free, yours to choose, and not optional

During those ten days you must go to a notary of your own choosing, in person, for impartial advice. The notary checks that the papers were delivered on time, explains the clauses of the FEIN and the FiAE one by one, answers your questions and has you take a test, and records all of it in a notarial act (article 15). The session must take place, at the latest, on the day before the mortgage deed. If the papers were late or you do not attend, the notary records that too and no podrá autorizarse la escritura pública de préstamo, the mortgage deed cannot be authorised. And it costs nothing: the act no generará coste arancelario alguno, generates no notarial fee at all.

Two points matter to a buyer from abroad. The first is who attends. The Act speaks of El prestatario, o quien le represente a estos efectos, the borrower or whoever represents them for this purpose, so a power of attorney can cover the session; ask the notary beforehand what the power must say, and think twice before sending someone else to the one meeting designed for you to understand the loan. The second is language. Under the Notarial Regulation a notary who knows your language may translate the document aloud, and may draw it up a doble columna en ambos idiomas, si así lo solicitare el otorgante extranjero, in two columns, in both languages, if the foreign party asks; otherwise an interpreter that you choose takes part and signs with you (article 150).

Who pays what

The Act settles in a few lines an argument that older loans are still taking to court. Los gastos de tasación del inmueble corresponderán a prestatario y los de gestoría al prestamista, the appraisal of the property is paid by the borrower and the agency that handles the paperwork, the gestoría, by the lender. The lender also pays the notary's fees for the mortgage deed and the registration of the mortgage at the Land Registry; copies of the deed are paid by whoever asks for them (article 14). The stamp duty on the deed is the bank's as well, by a tax rule of November 2018: Cuando se trate de escrituras de préstamo con garantía hipotecaria, se considerará sujeto pasivo al prestamista, in deeds of loans secured by a mortgage the lender is the taxpayer (Real Decreto Legislativo 1/1993, article 29).

So the only one of those costs that the Act puts on you is the appraisal. If the bank charges an opening commission, it is charged once and covers every cost of studying and processing the loan (in a loan drawn in another currency, the exchange commission on the first drawdown as well), and no other fee may be passed on unless it is for services solicitados en firme o aceptados expresamente, firmly requested or expressly accepted, and actually provided. The costs of the purchase itself (its own deed, its registration and its taxes) are a separate bill, set out in our guide to buying property in the Canary Islands.

The appraisal deserves a minute, because it decides how much you can borrow. It must be made by an approved appraisal company or professional that is independent of the lender (article 13). It does not last: reports caducarán, necesariamente, a los seis meses contados desde la fecha en que haya sido emitido el informe, expire, necessarily, six months after the date on which the report was issued (Orden ECO/805/2003, article 62). And you may commission it yourself: banks estarán obligadas a aceptar cualquier tasación de un bien aportada por el cliente, are obliged to accept any appraisal of a property supplied by the customer, provided an approved appraiser made it and it has not expired, and they may not charge you for checking it (Real Decreto-ley 24/2021, article 20). Since you pay for it, the report is yours: the Banco de España tells customers that paying gives the right a recibir del banco una copia o el original si la hipoteca no llega a formalizarse, to receive from the bank a copy, or the original if the mortgage is never signed.

A loan in euros can be a «foreign-currency loan»

This is the part of the Act that matters most to a buyer who earns abroad. A loan is «denominated in a foreign currency» not only when it is in yen or Swiss francs, but when its currency is not the one you earn in. The definition covers a loan in a currency other than that of the Member State where the borrower lives, or other than the one in which the borrower, when the contract is signed, holds the assets or receives the income with which to repay it (article 4).

The Ministry of Justice's directorate for registries and notaries explained in 2019 how the two tests work. One of them is enough. A resident of a European Union country with another currency (Sweden, Denmark, Poland) has a foreign-currency loan by residence alone. A resident of a country outside the Union is judged only by income and assets: No será un préstamo en moneda extranjera, a los efectos de la Ley, aquel que se conceda a un residente en un tercer país, no Estado miembro, salvo que se den los requisitos de la primera hipótesis, a loan granted to a resident of a third country, not a Member State, is not a foreign-currency loan for the purposes of the Act unless the requirements of the first test are met. For a buyer who lives in the United Kingdom, Switzerland or the United States and will repay from a salary or savings there, that first test is the one that counts: the same Instruction treats it as met when most of the income or assets that will repay the loan are in another currency, and says that it is for the bank to establish this at the signing, from what you declared for the solvency assessment (Instruction of 20 December 2019).

When the loan qualifies, article 20 gives you three things. You may convert it into la moneda en que el prestatario perciba la mayor parte de los ingresos o tenga la mayoría de los activos con los que ha de reembolsar el préstamo, the currency in which the borrower receives most of the income or holds most of the assets with which the loan is to be repaid, or into the currency of the Member State where you lived at the signing or live when you ask; unless the contract says otherwise, the exchange rate is the one published by the European Central Bank on the day of the request. The bank must keep you informed, and in any case whenever the amount you owe or your instalments differ by more than 20 per cent from what they would have been at the exchange rate of the day you signed. And the FEIN and the contract must explain all of this. If the bank fails in any of it, a consumer may have the currency clauses declared void and ask for the loan to be treated as granted, from the start, in the currency of their main income; a borrower who is not a consumer may agree another way of limiting the exchange risk instead.

Check that your FiAE says that this is a foreign-currency loan. If you are paid in pounds and it does not, ask the bank in writing why, before the ten days run out.

Insurance, accounts and other conditions

A bank may not make the loan depend on your buying its other products: tied sales are prohibited (article 17). There are exceptions, and they have limits. The bank may require an insurance policy that guarantees repayment and a damage policy on the property, but it deberá aceptar pólizas alternativas de todos aquellos proveedores que ofrezcan unas condiciones y un nivel de prestaciones equivalentes, must accept alternative policies from any provider that offers equivalent conditions and an equivalent level of cover, at the start and at each renewal, without charging you for examining them and without worsening the loan for it. It may require the account from which the loan is paid. And it may offer a better rate if you take a package (a card, a pension plan, its own insurance), as long as it also offers the loan on its own and shows you the difference in cost.

If the rate is variable, the reference index must be clear, objective and beyond the bank's influence (article 21); our note on IRPH mortgages shows what happens when an index is questioned. And there is one thing a variable-rate loan cannot contain at all: no se podrá fijar un límite a la baja del tipo de interés, no lower limit may be set on the interest rate. The story of the older loans that had one is in our note on floor clauses.

Leaving early, falling behind

You may repay all or part of the loan whenever you like; the contract can ask for notice, of one month at most (article 23). The right is to reembolsar de forma anticipada total o parcialmente la cantidad adeudada, repay early, in whole or in part, the amount owed. The bank may charge for it only within these limits, and never more than the financial loss it actually suffers: on a variable rate, up to 0.25 per cent of the capital repaid during the first three years or, as an alternative, 0.15 per cent during the first five, and nothing afterwards; on a fixed rate, up to 2 per cent during the first ten years and 1.5 per cent after that. A buyer who expects to sell within a few years should read that line of the FEIN before any other. The temporary ban on these charges for variable-rate loans ended on 31 December 2024 (Real Decreto-ley 19/2022).

If payments stop, the bank cannot call in the whole loan at the first missed instalment. The unpaid instalments must reach 3 per cent of the capital lent, or twelve monthly instalments, during the first half of the loan's life, and 7 per cent, or fifteen instalments, during the second half; and the bank must first demand payment and give you at least one month (article 24). Default interest is fixed too: el interés de demora será el interés remuneratorio más tres puntos porcentuales, default interest shall be the ordinary rate plus three percentage points, charged only on the principal that is overdue (article 25). Neither rule can be changed by contract. The Supreme Court uses the same thresholds as its yardstick for loans older than the Act, a parámetro razonable de lo que puede considerarse como incumplimiento esencial y suficientemente grave, a reasonable measure of what can be considered an essential and sufficiently serious breach; in May 2026 it added that the default is counted from the first instalment left unpaid, which in that case placed it in the first half of a thirty-year loan (judgment 811/2026; the same doctrine in 1148/2026, a case from Santa Cruz de Tenerife).

What our team does

Buying with a mortgage from abroad is work for our property team: we check the property, the seller, the debts and the paperwork before you commit a euro, review the reservation and arras contracts, and hold the notary appointment in your language; with a power of attorney we can complete for you. If the loan is already signed and something in it looks wrong, our banking team reviews mortgages for abusive clauses and takes on claims over early-repayment penalties and multi-currency loans. Both work from Costa Adeje, in Tenerife, and Corralejo, in Fuerteventura, in person or online: write to us.

Common questions

I live in the United Kingdom. Does Spanish borrower protection apply to my mortgage?

Yes. The Act on real-estate credit contracts applies to any natural person who mortgages a residential property in Spain with a professional lender, whatever their residence or nationality, and its rights cannot be waived.

Can the bank bring the signing forward because I am only in Spain for a few days?

No. The papers must reach you at least ten calendar days before the signing, and the session with the notary must take place at the latest on the day before; without it the deed cannot be authorised. Ask for the papers before you travel, or give a power of attorney.

I am paid in pounds and the loan is in euros. Is that a foreign-currency loan?

For the Act it is, when most of the income or assets you will repay with are in another currency. The bank must say so in the FiAE, and you then have the right to convert the loan into the currency of your income and to be told when the amount you owe moves by more than 20 per cent.

Do I have to buy the insurance the bank offers?

The bank may require cover, but it must accept an equivalent policy from another insurer, at the start and at every renewal, without worsening the loan. It may offer a better rate for taking its own, and must then show you the price both ways.

Who pays the notary, the registry and the tax on the mortgage deed?

The bank: the notary's fees for the mortgage deed, its registration, the gestoría and the stamp duty are the lender's. You pay the appraisal and any copies you ask for. The costs of the purchase itself are a separate matter.

General information on the law as it stands in October 2026 (Ley 5/2019, articles 2 to 4, 11 to 15, 17, 20, 21 and 23 to 25; Real Decreto-ley 24/2021, articles 20 and 23; Real Decreto-ley 19/2022, first additional provision; Real Decreto Legislativo 1/1993, article 29; Orden ECO/805/2003, article 62; the Notarial Regulation, article 150; the Instruction of 20 December 2019 of the Dirección General de los Registros y del Notariado; the Banco de España's customer portal; the Supreme Court's judgments 811/2026 and 1148/2026, read in full). It is not advice on a particular case: the bank's offer, the currency of your income and the papers you were actually given decide what applies to you.