Spanish mortgage product for Middle Eastern applicants has just been launched.
Launch of new Spanish Mortgage product for Middle Eastern applicants. Since the Spanish Mortgage regulation of 2019. It had become impossible for most residents of the Middle East to gain any level of non resident Spanish lending.
This has been due to a regulatory requirement surrounding the currency of an applicants income.
Just launched is a non resident product that is focused solely on clients wishing to borrow in Spain. Who originate, or are resident, in Kuwait, Oman or Bahrain.
Multinational Bank offering a mortgage in Spain
The lender whose origins are in Kuwait, is now actively looking to lend in Spain. They are a multinational Bank headquartered in Kuwait. The largest financial institution based there. Who have been trading since 1952.
For residents of Kuwait, Bahrain and Oman, buying a holiday or investment property. No longer does earning your incomes in Dirhams, Rials or Dinars, preclude you from the Spanish Mortgage market.
Loan to value available
Minimum loan size is 300k and maximum is 3 million euros. The loan to value is generally 65%. However for certain clients 70% might be possible. In general therefore applicants will need to contribute a 35% deposit. Also have the money to cover costs of purchase, and loan set up.
Costs of purchase in Spain vary depending on where property is being bought. This is because each region has different purchase tax levels for resales. The lowest purchase tax is Madrid at 6% and highest region charges 10%.
New builds attract IVA at a standard 10% across Spain. Except Canary Islands where it is lower. Purchasers of new builds also need to allow for stamp duty tax. This is between 1.5% to 2% depending on region.
Other costs include Notary and land registry costs for purchase deed. Valuation fee and Bank arrangement fee. Other Spanish Mortgage related costs, for instance mortgage deed and mortgage deed tax, are picked up by the Spanish Bank.
Terms and conditions
At this moment only variable trackers are available. The Mortgage in Spain would track the 12 month Euribor. The margin above Euribor at 2.5% is more expensive than standard lending. But with Euribors dropping this still provides a rate under 5%.
The Bank arrangement fee payable at signing of the loan is 1.75% of the gross loan.
Maximum term of loan is 20 years. Up to the age of 75.
Debt to income ratios are 35%. This means the total outgoings the applicant have related to rent, mortgages or other credits cannot exceed 35% of the incomes. This ratio includes the new Spanish payments.
Who can access the new Spanish Mortgage product for Middle Eastern applicants
The loan covers all Nationalities who are working or expat in the three countries. Not just Citizens. With many potential buyers in Spain working in the oil or other Middle East industries, the new product will provide an option that has not been available for over 4 years now.
The new option will help property sales to Middle East clients. Also allow buyers to consider a higher budget, than their current cash deposits allow.
Independent mortgage advice in Spain
As an Independent Mortgage Broker in Spain, we are always looking for new solutions for clients who approach us. We are very happy to finally be able to offer a solution, to qualifying clients working in this region.
For more details on the product and application process. And to check whether in your situation you could access lending. Contact us today.
