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Mortgage costs

The costs of purchasing property in Spain with a mortgage can vary considerably

Mortgage costs

The costs of purchasing property in Portugal with a mortgage can vary considerably depending on the price of the property, the region in which the property is located, the advisers appointed (lawyers, brokers, agents, etc.) and the deal agreed with the vendor or estate agent. Having said that, estimating costs of 7-12% of the purchase price is currently a good guide.

Most banks charge opening fees and lawyers and brokers also have minimum fees. Notary, registry and tax office fees will not be significantly lower for cheaper properties. This means that for cheaper properties, the costs as a percentage of the property price can be significantly higher than 10%. For properties with a price less than € 40,000, a mortgage may not be the most cost-effective solution.

Most banks charge opening fees and lawyers and brokers also have minimum fees. Notary, registry and tax office fees will not be significantly lower for cheaper properties. This means that for cheaper properties, the costs as a percentage of the property price can be significantly higher than 10%. For properties with a price less than € 40,000, a mortgage may not be the most cost-effective solution.

Costs Explorer

Costs for €300,000 property - €180,000 mortgage All costs are estimates. Click on each cost for a more details.

Property costs

Property tax varies from region to region and the tax is different when buying a second-hand property compared with a new-build. For second-hand properties the tax is referred to as ITP whereas for new-builds it is called IVA. These taxes are usually somewhere between 8% and 10% of the property price. Some regions have fixed percentages no matter what the price is, whereas others have tax bands. We can advise on this when you find your property.

These fees can vary depending on the bank used for the mortgage, the notary and registry offices used and whether the bank uses an independent gestoria to administer the completion duties. The notary will have to prepare two sets of deeds, one for the property and one for the mortgage and there is a separate set of fees associated with each. Since the new mortgage legislation that has come into force in 2019, the lender now pays for the notary, registry and gestoria fees relating to the mortgage.

Lawyers charge different amounts. Many charge 1% of the property price plus IVA but may negotiate for higher priced properties. Some clients appoint gestorias instead of lawyers as they are usually a lot cheaper, without realising that gestorias are not qualified to practice law and therefore the client is not sufficiently protected in the event of any legal problems. A lawyer recognised by their local College of Lawyers (Colegio de Abogados) will charge more than a gestoria and lawyers have guidelines on what they should charge, although this does not mean that they all charge the same. The most important thing is to appoint a competent lawyer.
Sub-total: €33,700

Mortgage costs

In November 2018, the Spanish Government issued a decree to make it compulsory for banks to pay this tax and not property buyers. Up until this time, it had always been borrowers who were liable to pay the tax.

These fees can vary depending on the bank used for the mortgage, the notary and registry offices used and whether the bank uses an independent gestoria to administer the completion duties. The notary will have to prepare two sets of deeds, one for the property and one for the mortgage and there is a separate set of fees associated with each. Since the new mortgage legislation that has come into force in 2019, the lender now pays for the notary, registry and gestoria fees relating to the mortgage.

The bank opening/Initial approval fee is a fixed percentage that the bank charges at completion. The typical amount is 1%, although some banks charge 1.5% or more depending on the circumstances.

The valuation fee is charged by the independent valuation company that the bank appoints. The valuation company is usually selected at random by the bank and the amount charged will depend on the company appointed and the property price. The valuer will invoice for their work after they have prepared their report.

We charge an initial fee of €695 if clients wish to proceed with a formal application. Prior to this, our advice is free of charge with no obligation to proceed. Our standard Initial approval fee of 0.6% of the mortgage amount (minimum €1,000) is payable upon initial approval of the mortgage prior to valuation. For larger mortgage amounts, depending on the amount of work involved, this fee may be negotiable. If a mortgage is declined or the amount offered is lower than in our initial quotes, we guarantee to refund the fee if clients choose not to proceed. Please refer to our Terms and Conditions.
Sub-total: €3,895 Total: €37,595

Some agents charge a fee to both the buyer and the vendor. In the cost breakdown, we have not included any fee the agent might charge the buyer. You should check with the agent whether they charge a fee to the buyer.
Sub-total: €3,695 Total: €37,395 Other costs Estate agent fees: ?