Borrowing to buy, and what it costs on the coast now
Most of what gets written about buying on this coast is about the price of the property itself: what a two bedroom flat in Fuengirola costs against one in Dénia, whether the asking price has softened, whether there is room to negotiate. All of that matters, but it is only half the sum. The other half is what it costs to borrow, move and hold the money that pays for the place, and that side of the equation has quietly shifted over the past couple of years in ways worth understanding before you start looking at listings.
We spend a good part of our week talking to people at the very start of their search, long before they have a shortlist of towns, let alone a shortlist of flats. The question we hear most often after "where should we look" is "what will this actually cost us, once the mortgage and the fees and the exchange rate are all in the mix". It is a fair question, and a more useful one than it sounds.
Borrowing has eased, without becoming cheap
The European Central Bank spent 2022 and 2023 raising rates sharply, and Euribor, the index most Spanish mortgages are tied to, climbed with it. Since then the direction has been the other way: the ECB has cut its key rate several times through 2024 and into 2025, and Spanish banks have followed with lower fixed and variable mortgage offers than buyers would have seen two or three years ago.
That does not mean borrowing is cheap in the way it was in the years before 2022, when rates sat near zero. It means the sharpest edge has come off. A non-resident buyer taking a mortgage today is likely to find the arithmetic more forgiving than it was at the peak, without being back to the terms of a decade ago. Worth checking current offers from two or three banks before assuming either extreme.
What Spanish banks actually ask of a non-resident
Financing rules for buyers who do not live in Spain have stayed fairly consistent. Most banks will lend up to somewhere between sixty and seventy per cent of the purchase price or valuation, whichever is lower, against the eighty per cent or so that a resident with a Spanish income might be offered. They will want proof of income, usually two to three years of tax returns from your home country, and most will ask you to take out life insurance tied to the loan.
The valuation itself is done by an independent Spanish surveyor appointed by the bank, not by the seller or the estate agent, and it can come in under the agreed price, which changes how much you actually need to bring in cash. None of this is new, but it catches people out every summer because they have priced their budget against the purchase price alone, not against what a bank will actually advance.
The currency question, for sterling and dollar buyers
British buyers remain one of the largest groups purchasing on both coasts, and the regular nationality figures published by Spain's Consejo General del Notariado have shown that pattern holding for years, alongside steady buying from Belgium, the Netherlands, Germany and the Nordic countries, and continued interest from North America. For all of them, the exchange rate on the day of transfer is doing real work on the final number.
The pound and the dollar have both moved against the euro over the past year without swinging as sharply as they did for stretches of the previous decade. That relative calm is worth using. Buyers converting a large sum are generally better served by a currency broker locking in a rate ahead of completion than by leaving the transfer to whatever the exchange happens to be on the day, and the saving on a typical coastal purchase is rarely trivial.
The other costs that sit on top
The purchase price is the headline. The transaction costs are the sentence that follows it, and they are rarely read closely enough.
Buying resale on either coast, budget roughly ten to thirteen per cent on top of the price for transfer tax, notary, land registry and legal fees, with new build carrying VAT instead of transfer tax and landing in a similar range once stamp duty is added. Mortgage arrangement fees and the bank's valuation add a further, smaller amount. None of this is hidden, but it is easy to underweight when you are focused on the number on the listing.
What this means for someone starting a search now
If you are at the beginning of this process, the practical order of operations is worth following. Speak to a mortgage broker who works with non-resident buyers before you fall for a particular flat, so you know your real ceiling. Get an early indicative offer from a currency specialist so you understand what your budget looks like once it has crossed the exchange, not before. Build the ten to thirteen per cent into your working number from day one rather than discovering it at the notary's office.
None of this is a reason to hurry, and it is not a reason to hold back either. It is simply the arithmetic that sits underneath the coast's more visible conversation about prices and towns, and it tends to matter more, not less, once you are actually ready to make an offer.
We are always glad to talk through where you are in your own thinking, whether that means an introduction to a broker who knows how non-resident lending actually works on this coast, or simply a longer conversation about which numbers matter most for your own situation. Get in touch when you are ready, and we will take it from there.