Many foreigners apply for a mortgage in Spain to buy a home. Most of them are European, have an average income of around €6,000 per month, are interested in buying homes costing over €200,000 and want fixed-rate loans.
This is the foreigner profile who applied for mortgages through idealista/hipotecas in the second quarter. According to the data, British, German, and Swiss made the most applications between April and June, accounting for 42.5% of the total. Americans, Dutch, French, Irish, Belgians, Italians and Swedes follow.
Countries with the most mortgage applications in Spain
![[Data from the second quarter of 2023]](https://st3.idealista.com/news/archivos/styles/fullwidth_xl/public/2023-09/media/image/earnings.png?VersionId=z86VfF_Uy_jSBdZfvv2xXd0B1qt_kDW2&itok=qCFOYeb3)
More specifically, customers from other countries interested in obtaining financing to purchase a property have a monthly income of €5,933, are looking for homes priced at around €210,000, and request an average mortgage of €151,200. The operation would, therefore, imply a level of indebtedness of 24%. These figures are higher than the average for national mortgage applicants.
Proof of this is that the applications received by idealista's mortgage broker between April and June were from Spanish households with an average income of €3,277 per month, who were looking for a loan of around €135,900 to purchase homes priced at €175,000.
However, figures vary according to the nationality. In the case of US and Swiss nationals, the average monthly income exceeds €9,000, while those coming from Italy and Belgium do not reach €5,000. There are also differences in the purchase price of homes, and once again, the US and Switzerland top the list, this time together with Germany, with average values of over €240,000.
In terms of the amount of mortgage requested, the same trend continues. Switzerland leads with an average of over €180,000, while US buyers apply for around €175,400. Belgian and French applications, however, register average values below €130,000.
Considering loan applications and house prices, the average financing requirement of foreigners is around 70%, in line with the limit generally established by Spanish banks for financing the purchase of second homes.
The coast predominates
Most applications are to finance home purchases in coastal areas, historically the prime location for foreigners.
According to the idealista/hipotecas report, the Valencian Community receives most of the applications, accounting for 29.4% of the total, followed by Andalusia and Catalonia, with 21.3% and 14.1%, respectively.
Within Spain, the highest number of mortgage applications received are to purchase homes in the Balearic Islands and Madrid, with the average amount of applications exceeding €200,000 in both cases. At a distance are Andalusia and the Basque Country, with just over €160,000. Murcia and Aragon, on the other hand, have average amounts below €100,000 and are the last autonomous communities in the ranking.
Demand for mortgages from non-residents in Spain
| Autonomous community | Home rent (€/month) | Purchase price (€) | Requested mortgage (€) | Financing |
| Andalusia | 5,810 | 221,948 | 160,679 | 72% |
| Aragon | 4,664 | 111,700 | 94,078 | 84% |
| Asturias | 6,040 | 191,692 | 120,490 | 63% |
| Canary Islands | 5,390 | 168,410 | 120,753 | 72% |
| Cantabria | 6,447 | 172,067 | 134,402 | 78% |
| Castile-Leon | 4,283 | 167,667 | 133,238 | 79% |
| Castilla-La Mancha | 4,707 | 131,859 | 108,542 | 82% |
| Catalonia | 6,271 | 227,849 | 166,616 | 73% |
| Valencian Community | 5,724 | 174,550 | 127,941 | 73% |
| Galicia | 6,624 | 166,023 | 122,791 | 74% |
| Balearics | 7,334 | 328,258 | 220,550 | 67% |
| La Rioja | 2,200 | 128,000 | 105,975 | 83% |
| Madrid | 6,292 | 287,757 | 204,022 | 71% |
| Murcia | 5,054 | 131,835 | 91,428 | 69% |
| Navarra | 5,825 | 162,833 | 123,524 | 76% |
| Basque Country | 5,777 | 228,882 | 146,853 | 64% |
| Average in Spain | 5,933 | 210,368 | 151,234 | 72% |
More than 70% of mortgages are fixed-rate
Most mortgages that are finally taken out are fixed-rate mortgages. According to the idealista mortgage broker, in the second quarter of the year, 72% of loans signed by non-residents were fixed, compared with 25% for mixed mortgages and just 3% for variable mortgages. In the case of Spanish customers, the fixed rate is also the most common, although mixed mortgages are gaining weight, especially in subrogations.
The average amount mortgaged was higher than the amount requested, with an average of €174,600, as was the purchase price of the homes, which rose to over €293,000, with an average financing of 61%. The study points out that, in 15.6% of cases, the amount financed was less than 50% of the purchase price, although in half of the operations, the mortgage represented between 60% and 70%.
Considering that the average income of new foreign mortgagors stood at €8,668 between April and June, the level of indebtedness stood at 21%, below the maximum 30%-35% recommended by experts. This ratio has fluctuated between 15% and 23% over the past three years.