Getting a mortgage in Spain at low interest rates has many advantages.
Since the start of a full-scale war, banks in Spain are less likely to approve mortgages for Ukrainians, and interest rates on them have increased. However, this type of loan is still profitable for Ukrainian citizens.
The founder and CEO of the foreign real estate agency Yuriy Grushetsky told “Minfin” what is needed for this.
Since the spring of 2021, demand for Spanish resort real estate has grown among Ukrainians. One of the reasons was the favorable terms of purchase. In particular, the ability to quickly obtain a mortgage at 3.2% per annum for 15-25 years and secured by the purchased property, as well as mortgages with coverage of 50-60% of the cost of housing based on Ukrainian documents confirming the origin of funds and income.
However, in the fall of the same year, everything changed. Almost all Spanish banks stopped issuing mortgages to Ukrainians, but did not provide any adequate explanations to financial institutions.
How are mortgage terms now
Investors who took out a mortgage by the fall of 2021 do not face problems in servicing the loan: the terms remained unchanged. Not only is it more difficult for new clients to get a loan, but the interest rates and coverage for them are completely different. According to Grushetsky, since the beginning of the great war, only three mortgages have been issued to Ukrainians: a sailor, an IT specialist, and a businessman doing business in the Czech Republic and having residency there.
Currently, only two banks issue mortgages for Ukrainians: Santander and Sabadell. Their requirement is that the borrower's income must be generated outside of Ukraine. Ideally, in Spain or other EU countries.
At the beginning of 2024, mortgage interest rates were approximately 6.5-6.7%. However, with all mandatory expenses and payments (insurance, etc.), it amounts to 7%. Rates can be floating, that is, they can change throughout the entire term of the mortgage.
How to get a mortgage
First. To carry out any financial transaction in Spain, you need to obtain an NIE (Número de Identificación de Extranjero) – an individual tax number (analogous to the Ukrainian INN). NIE can be obtained even from Ukraine through the Spanish consulate. Since the beginning of the war, this code has been issued for Ukrainian citizens as part of the temporary protection program.
Second.For the bank, it is necessary to prepare proof of income. Financial institutions carefully check the origin of funds, so it is important to have all the documents on hand. Ukrainian clients who are currently officially working in Europe under a contract or have opened their own business, have been showing normal income (not the minimum) for at least one year, paying taxes by filing European declarations, and receiving a mortgage.
Third.Spanish banks want to know everything about their client: where you live, how much you earn, what assets you have, where you worked before and why you quit. They are interested in whether they can be considered a reliable borrower who will be able to repay the loan. It should be noted that they do not take into account income received in Ukraine, because it is too risky for the bank. To get a mortgage, you need to show a stable income in Europe.
One option is to open your own business in Europe, real, operating and profitable. The second option is to find a job with a high salary.
Fourth.The bank evaluates your entire family. For example, if one person works and others depend on their income, this is also taken into account. The bank calculates whether you can provide for all family members.
“Even if you manage to get a mortgage this way now, in a year the bank may request proof of your income. Then, if you cannot provide real documents, serious problems will arise. Once you have tarnished your reputation in the EU, you will not be able to wash it off, it will follow you for the rest of your life,” notes Yuriy Grushetsky.
The specialist adds that getting a mortgage in Spain at low interest rates has many advantages: the opportunity to purchase real estate at a fixed price and create a credit history. It is important that by taking out a mortgage, you have already fixed the price of the property, and this is advantageous given the current and projected growth in prices for Spanish real estate.
As reported, as of the end of July 2024, more than 6 million Ukrainian refugees were registered in Europe. In particular, in Spain – 211.3 thousand