Who are the main Spanish Banks and are they still offering Spanish Mortgages
Due to the economic climate and integration and merger of various Spanish Banks those banks still lending in Spain are now limited in their numbers. Many brand names are starting to disappear as the new owner re-brands and closes Branch Networks and the banking system is in a constant state of flux.
In recent years Deutsche Bank had withdrawn offering mortgages in Spain to persons not earning their incomes in Euros. This has precluded UK citizens from applying to them. To ensure they have access to the Scandinavian and Swiss market they have developed a very complicated currency mortgage which allows clients of those countries to maintain a loan in their home currency. Where they do offer lending it is at 60% loan to value and whilst rates are competitive a rate protection policy which is compulsory adds significantly to overall cost.
Lloyds International ES
In May 2013 it was announced that Lloyds Bank was selling its small branch network and its current client book to the Sabadell Group. The implications of this meant that one of the last lenders who did not add life cover as compulsory and the very last lender offering any interest only periods for Spanish loans disappeared in February 2014.
BBK has taken over Caja Sur and Kuxta and has been in the process of merging the new network. BBK has kept brand names like Caja Sur where regionally they deemed it sensible to do so.
For many years the bank had been focused almost entirely on their own properties where they would provide Spanish loans for up to 70%. From quarter 4 of 2015 the Bank has taken a far more aggressive approach to the total mortgage market for both residents and non residents. Launch of leading edge product in terms of rates and conditions has been part of this focus. for independent properties the loan to value is up to 70% . Product terms have some linked products and they take 5 years of building insurance payments upfront but unlike other Banks life cover is not compulsory.
The Sabadell Group is the 4th largest Bank in Spain and has taken over a number of other Spanish Banks including CAM. They are one of only two banks who continue to offer up to 70% as standard. Sabadell, mainly through its Sol Bank network is actively continuing to offer non residents Spanish Mortgages and its buying of Lloyds in Spain confirmed their ongoing desire to supply the nonresident market. Sabadell in 2015 bought the TSB branches from Lloyds in the UK further proof of their desire to increase their presence and product base with non Spanish clients.
Product terms are competitive and they have a premier product for higher earners and can negotiate some of the best terms in the market for the right client profile. Life cover is compulsory for all applicants unless they live outside the EU and to avoid the borrower cancelling it at a later date they tend to add the life cover as a one off premium added to the mortgage loan and amortised over the life of the loan.
Barclays Bank in Spain announced on the 8th of May 2014 that they will be moving the banking retail arm in Spain to non core business and sell or liquidate the division. Barclays has now been bought by Caixa Bank. Caxia Bank remain active in the non resident market and have opened a new international arm Hola Bank. Caixa Bank link rates to the total relationship and normally expect the borrower to earn a minimum of net € 45k in order to apply.
Bankinter offers nonresident mortgages in Spain up to 70% loan to value for UK applicants who earnings are above gbp 40k and up to 70% for all Northern European applicants
70% for UK based applicants or those residing outside Europe will only be granted in the case where the purchase price and loan size is deemed significant enough and the earning levels of the applicant are high.
Bank inter are very keen on pricing of fixed rate products . Bankinter will negotiate on price and terms and conditions for the right client profile. Bankinter does not have the same issues as many banks in terms of defaults due to more diligent lending undertaken during the boom. Bankinter continue to actively offer mortgages in Spain.
Probably the best known Spanish Bank after Santander, Bankia is an amalgamation of a number of Banks forced together by the Spanish Government. Bank took over BMN in 2017 and are now actively offering mortgages. Loan to values have however dropped to 60% and the risk assessment of Bankia are not as clear cut as they were with BMN.
Unicaja still provides Spanish Mortgages but has no set products. All applications for a Spanish Mortgage are client specific and after full analysis including the paying for and obtaining of a valuation the client will be given terms, rates and loan to value.
Unicaja are more focused on the resident market and also have many inland branches re more effective than others when resident and considering a loan on Rustica land.
Santander Spanish largest Bank is not focused currently on its home market. Santander has withdrawn their UK based Spanish Mortgage department and access to any loans is only via their Spanish network. Loans are normally a maximum of 60% and for non residents rarely at the best pricing but as they do not work via brokers it is always a good idea to check out directly what they may be willing to do.
CajaMar like many of the other Banks in Spain in the current financial climate only wishes to mortgage property they own. Whilst the door remains slightly open to other applicants maximum loan to value is normally 60%with high rates.
EVO like Bankia are an amalgamation of a number troubled Banks. Previously owned by the government they were only effectively offering non residents mortgages where the client is buying one of their stock. EVO bank has now been bought out by a US investment fund and is no longer active as a lender.
Abanca have a UK based branch in London and will offer UK residents a loan in Spain up to 70% of the purchase price. Rates are generally mid pack in terms of competitiveness but the starting rate is very attractive at 1.25% above Euribor. All rates are “from” so each rate is given on a client by client basis based on overall risk of the application.
A privately family owned Bank, Banca March quietly gets on with business. Mortgage rates and conditions are client specific based on the quality of the applicants fiscal situation. Banca March is the most solvent Bank in Spain and has the highest solvency rate in Europe. They have been voted best private bank in Spain for 5 years running.
As a privately owned savings Bank CajaMurcia remains active but only in the Costa Blanca. They prefer to mortgage only their own stock but will consider other applicants. Rates and terms are client specific but up to 70% can be considered for the right client.
Citibank and Banco Popular
Citibank have a small network in Spain but do not offer any Spanish mortgage facilities.
Banco Popular hard hit during the boom due to a high exposure to new developments have remained active during the last few years. Key issues remain that they often like to link to obscure index rather than Euribor and can have erratic risk assessment. Banco Popular is one of the few Banks without a fixed product but will offer 70% on a variable rate basis. Banco Popular have now been taken over by Santander and remain working with brokers and having a 60% loan to value non resident offering.
TARGO Bank which is a small network previuolsy owned by Banco Popular have better service levels, clearer criterias and an ability to look at more complex lending like plots of land and mortgages not in a personal name. TARGO will lend up to 65% without life cover required and have very low fixed rates .TARGO can only lend in specific areas where they have a branch presence.
Caja Sur can offer up to 70% loan to value to non residents and is part of the BBK group.
Pricing is average but this lender does not insist life cover is contracted with them so for some clients higher rates are outweighed by the fact that with another lender life costs would be very costly.
Caja Sur prefer loans below the 400k mark and tend to operate in the middle market rather than high end.
BBVA is Spanish second largest Bank. They do offer Spanish mortgages to non residents but access and product is limited. Like Unicaja if applying in Spain terms will not be known until a valuation has been paid for and terms are client and application specific. The only time this was not the case is BBVA London who have a jointly Bank of Spain and FSA regulated product offered from their UK Branches BBVA offer up to 60% loan to value. BBVA London is no longer offering residential loans for non residents buying in Spain.
Caixa bank are Spain’s 3rd largest Bank. Caixa Bank are actively looking for non resident mortgage applications but prefer the top end of the market. They offer up to 60% loan to value ( 70% for UK nationals) and up to 50% for loans in excess of € 1m. The Bank offers a competitive fixed rate for the first 5 years followed by relatively low margins above Euribor. Limited on age and total term of loan the La Caixa also adds life insurance policy as compulsory as a lump sum at completion.
Caixa bank have a very low headline fixed rate but this product is linked to products contracted some of which would be difficult for a non resident applicant to meet. As with many banks written into the mortgage deed is what will happen to the rate if either products linked are cancelled or not originally taken. Caixa Bank normally have a minimum earning level of around € 45k per year to consider lending.
UCI are the lending arm of a joint venture between Santander and a French Bank. UCI is not a Bank and purely offers Spanish mortgage facilities for residents of Spain and non residents. Service levels and consistency of underwriting are the key issues for UCI.
UCI offer up to 70% for EU nationals and 50% loan to value for non EU nationals. Rates include a variable rate which is competitive and a range of fixed/mixed rates from 3 years to 10 years fixed followed by variable. UCI do not require life cover is contracted with them but do require that 5 years worth of buildings insurance is paid at completion. UCI also have many geographical or property limitations.
NY KREDIT are a Danish Bank. They offer mortgages in Spain but only to passport holders of Denmark, Sweden or Norway. NY KREDIT cannot offer loans across all of Spain and have minimum loan level sizes but for Scandinavians who can access them they provide good interest rates and higher loan to values. They remain the only bank able to offer interest only.
BMN were an amalgamation of a number of smaller Cajas including Caja Murcia and Caja Granada. In the last half of 2015 this lender came back into the non resident mortgage market with a range of best buy products. BMN could offer up to 70% and had some very attractive fixed rates for both 20 and 25 year terms. Redemption penalties are currently at variable rate levels making them an attractive option in the current market. BMN was taken over by Bankia in 2017 and loan to values reduced in general to maximum 60%.