How much equity do you need for a Spanish mortgage?
One of the first questions buyers ask when looking to finance a property in Spain is: how much of my own money do I actually need? The basic rule is simple. But for entrepreneurs, there are a few specific details attached that you need to know before making an offer.
Table of contents
- What is the minimum personal contribution?
- Which assets count?
- Why this works differently for entrepreneurs
- Frequently Asked Questions
- Source attribution
- Personal advice
What is the minimum personal contribution?
Spanish banks finance a maximum of 70% of the purchase price or appraisal value for non-residents, with the lower of the two serving as the starting point. You therefore contribute at least 30% yourself as equity.
On top of that come the buyer's costs. In Spain, these are higher than in the Netherlands. These costs are never co-financed and must be covered entirely from personal funds. If you add up the minimum down payment and the buyer's costs, you quickly arrive at a significant percentage of the total purchase price that you need to have ready.
Which assets count?
This is where the difference lies that is of great importance to entrepreneurs.
Savings are the most direct form of equity. Spanish banks want to see that a substantial portion of the required equity is demonstrably available as savings, preferably for a continuous period of six months.
Assets held in a holding company or BV also count. This is an important factor for director-major shareholders and entrepreneurs. If your private assets are held partly or wholly in a company, this need not be an obstacle. The bank assesses whether these assets are attributable and callable. Good documentation is essential in this regard.
However, the equity in your Dutch home does not count as personal assets. This surprises many buyers. Equity only becomes personal assets once the property has been sold and the money is actually available. If you take out a second mortgage in the Netherlands to release the equity, those extra monthly payments *do* count towards the calculation of what you can borrow in Spain — resulting in a lower borrowing capacity.
Why this works differently for entrepreneurs
As an entrepreneur or director-major shareholder, your financial profile differs from that of an employee. Spanish banks assess income based on taxable income — not on turnover, not on profit within the BV, and not on assets held within the company that are not explicitly demonstrable.
This means that, as an entrepreneur, you must plan in advance which capital you will contribute as your own contribution and how you will make this demonstrable. Capital held in a holding company can be included — but the documentation must be correct. A Spanish bank asks different questions regarding an entrepreneur's file than regarding the file of an employee, and it is precisely at this point that many entrepreneurs unnecessarily get stuck.
We always advise entrepreneurs to map this out early, preferably before a specific property is in mind. This way, you know exactly which assets you can deploy and in what form, and what steps, if any, are required to make the file bankable.
Frequently Asked Questions
Does my pension capital count as equity?
Pension capital built up in a pension insurance policy or annuity is generally not immediately withdrawable and therefore does not count as equity in a Spanish mortgage application.
Can I use a gift as personal assets?
Yes, gifts can be included, provided they have been demonstrably credited to your bank account and the origin of the money is clear. Spanish banks look at the financial situation at the time of application.
Does the equity need to be available at the time of application?
The assets do not need to be fully available at the time of the initial application, but they must be at the time of signing at the notary. Spanish banks typically re-check the availability of own funds just before final approval.
What if my assets are spread across multiple entities?
That is not an obstacle, but it requires a clear, comprehensive overview. We help entrepreneurs compile a complete and bankable asset portfolio.
Facts & sources
| Claim | Source | Status |
|---|---|---|
| Maximum financing for non-residents is 70% | Banco de España — regulation of mortgage lending to foreigners | Established policy |
| Buyer's costs are never co-financed. | Spanish mortgage law Ley 5/2019 | Established |
| Equity in a Dutch home does not count as personal assets | Spanish bank appraisal practices | Common practice |
| Assets in a holding company can be included | Spanish bank assessment practices — dependent on documentation | Custom work, no guarantee |
| Taxable income as the basis for assessment | Fixed assessment method of Spanish banks for the self-employed | Common practice |
Personal advice
The question of how much equity you need is easily answered. The question of which assets count and how to demonstrate this—that is where the real complexity lies for entrepreneurs. At Spaanse Hypotheek, we guide entrepreneurs and director-major shareholders daily in mapping out their asset position and building a dossier that Spanish banks understand.
