I´m currently in the throes of obtaining a Spanish mortgage…..and what a tortuous process it is proving!

I have approached several banks in Spain, and let me tell you, every single one will talk a good mortgage and promise the earth, but when it comes to the crunch, there´s not a lot of action.

Like most things in life, success can often be dependent on the person that you are dealing with at the Spanish bank. My advice is to try to establish a good relationship with the representative from the bank. Most branches have thresholds that they can lend up to – for instance for residents in Spain, the branch lending threshold tends to be around €300,000 – also bear in mind that the first quote you receive won´t necessarily be the best. Don´t be afraid of negotiating better terms, and chipping away at the rate to try to secure a better mortgage in Spain.
Also, if you have something to bring to the table, such as personal banking, deposit accounts etc, the bank is going to be far more likely to entertain you as a mortgage client.

I found that most of the banks were offering me Spanish mortgages of up to 30 years, with interest rates varying between Euribor + 0.75 and Euribor + 1.45, depending if I acquired other bank products such as life insurance and payment protection etc. The higher end of the spectrum is usually reserved for interest-only mortgages in Spain, which are rare to find.

I´m looking for a 60% loan to valuation (LTV), ideally interest-only for the first 3 years. I have cash savings, but would rather hang on to these reserves and lower my monthly outgoings, rather than lower my debt ratio and spend cash that may be needed during the current recession.

Solbank have been the most helpful – there is a guy in the Elviria branch, Bernardo, who has been very good – switched on and commercially minded. Unfortunately, Solbank do not offer an interest-only facility, so I´ve also been looking at options with Lloyds TSB, who have a good product with an interest only option for the first 3 years, one of the very few banks to offer this facility.

I´ll let you know which option I go for.