Mortgage calculator

A mortgage calculator is an online tool that allows you to quickly calculate the terms of a loan for purchasing a property. The calculation is based on the specific information provided by the applicant, such as the loan amount, interest rate and monthly income.

The calculator provides an estimate of the monthly repayments and the total cost of the loan, helping you to plan your finances and make informed decisions before applying for a mortgage.

According to the regulations of the Bank of Spain, banks cannot finance more than 90% of the purchase price. This means you will need to provide around 10% of the property’s value as a deposit, in addition to covering the costs and taxes associated with the purchase.

Monthly mortgage repayments are calculated using the French loan amortisation method, which considers:

• Loan amount: The total amount financed.
• Interest rate: This may be fixed, variable or mixed.
• Repayment term: The period, in years, over which the loan will be repaid.

The calculation typically follows an amortisation formula in which the monthly repayments remain the same and include both the capital and interest portions. Over the course of the loan, the interest portion of each payment gradually decreases, while the amount allocated to repaying the capital increases.

In the case of a fixed interest rate, the monthly payment remains unchanged. If the rate is variable, the repayment amount may change due to fluctuations in the Euribor.

No, mortgage simulations are not binding. The estimates provided by the calculator are based on the information you enter and on average market rates, so they do not guarantee that you will be able to secure those conditions when applying for a loan.

The final approval and the terms of the mortgage will be subject to the lender’s assessment, which will consider additional factors such as your financial profile and credit history.

The mortgage approval process may seem complex, but it generally involves the following main stages:

1. Research and simulation: completing the form

• Before applying for a mortgage, it is advisable to research different offers from financial institutions. A mortgage broker can be a good option to help you compare alternatives and guide you through the entire process.
• You will need to complete a mortgage application form, which usually includes information such as the amount requested, the loan term and details of the property to be financed.

2. Submission of documentation: Along with your application, you will need to provide documentation, which may include:

• Identification documents
• Proof of income (payslips, tax returns)
• Property documents (land registry, etc.)
• Evidence of other financial assets and debts

3. Credit assessment: The lender will review your application and the documentation provided. This process may take several days, depending on the institution.

4. Property valuation: The bank will require an official valuation of the property to be financed. An authorised valuer will determine the market value of the property, which is important to ensure that the loan matches the property’s value.

5. Loan offer: If the assessment is favourable and the valuation is appropriate, the bank will present a mortgage offer. This will include the loan terms, such as the approved amount, interest rate, repayment term and associated costs.

6. Signing the loan contract and deeds

• Once you accept the offer, the next step is to sign the mortgage contract. It is essential to read all the terms and conditions carefully before signing.
• The contract must be registered with the Land Registry to ensure the bank has security over the property.
• Once all the paperwork and registration are completed, the funds will be released for the purchase of the property.