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Mortages in Spain, payments and banking system

Mortgages in Spain

It is possible to get a mortgage for real estate purchase from a Spanish bank. Both if you are resident or non-resident. For residents in Spain , it is possible to borrow up to a maximum of 70-80% of bank valuation, while non-residents usually borrow up to a maximum of 60-70%. The repayment period is between 10-20 years, depending on age. Spanish banks often has an upper limit of 70 years for loan repayment. This often means that a person who is 60 years old and looking for a home loan may be a 10 year repayment period.

The Spanish banking system

The banking system is well established and modern. There are many banks and all banking operations are controlled by the Bank of Spain, which has its headquarters in Madrid and branches in all provincial capitals. The banks are divided into clearing banks and saving banks and several foreign banks operating in Spain.

If you do not plan to learn to speak Spanish or know that you have problems with the language, you may want to base your choice of bank on the availability of English-speaking staff. There are several banks along the Costa del Sol that have English -speaking staff. When choosing a bank , it is also a good idea to ask friends and acquaintances to recommend a bank and if you're after a while feel that you are not happy with your bank, you can always open an account somewhere else!

That fact that there are a large number of banks in Spain can mean that it is difficult to decide which one you want to pick for a mortgage and/or checking account. We will gladly recommend a bank that we have good experience. This can be dependant on where along the coast you will buy.

If you plan to keep most of your money outside Spain and transfer on regular basis to your Spanish account you should ask about the conditions that the bank has for this (eg when the money arrived in your account , how long will it before you can use them) and the charges levied.

Banks sometimes have a range of services such as insurance and investments which can be useful for you. Just be aware that these services can be more expensive than those offered by specialist companies and they are not likely to be independent.

Automatic payment of bills ( Domiciliacion )

Spanish banks offer similar banking services that you are used to in the United Kingdom . Automatic bank transfer of your bills such as telephone, electricity , water company community, etc.

An easy and convenient way to get their bills paid is through Direct Debit. Most often , your bank can help arrange this ,what is needed is a copy of the bills that you wish to be paid automatically through your account.

When it comes to bills from the municipality ( Ayuntamiento ) , eg garbage collection fee ( Basura ) and council tax ( Bienes Inmuebles , IBI ), you are usually go to Town Hall with an original bill and ask for upcoming bills to be direct debited through your bank.

Non- resident accounts may not be overdrawn , so make sure that there are sufficient funds in the account to pay the bills. The automatic payment service is usually free.

Bank Accounts

Account types on the Spanish banks are basically the same as we are used to in the UK . If you have you bigger amount you wish to deposit in the bank , you should always find out what account offers the best interest rate. Do not forget to higher interest rates usually require a longer period to deposit and thus a longer period of notice.

You should think carefully about how you want to use your money in the future and always make sure you always have a certain amount on a regular checking account where all funds are always available for you.

Savings Book ( Libreta the Ahorro )

This is usually used as a transaction account for cash withdrawals, bill payments , etc. The interest is almost non existent. Most open a general account or a savings account at their bank. A general account in Spain is about the same as in all countries, and you are provided with a cheque book and debit card. Please note that cheques are generally not accepted as a payment in shops and businesses . Debit and credit cards are used instead You will receive monthly statement of account

Checking Account ( Cuenta corriente con talonario )

As the name says is cheque connected to the account, and then appropriate, for those who prefer to use the check.

Deposit Account ( Cuenta de deposito )

In the UK , this is usually the account called the deposit account . This account gives the highest interest rate which, as stated depends on the amount and period. The minimum amount is usually Five Thousand Euros and period can be anywhere from 15 days to several years. In times when prevailing interest rates are going down , usually obtain the best interest rate for short periods , 15 days to 3 months. When interest rates are going up , it is usually better to opt for longer periods.

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