The Spanish government has introduced several new mortgage laws - meaning your spanish mortgage calculator may no longer be accurate.

The good news, however, is that applying for a Spanish mortgage is now clearer and much cheaper than before.

The new Mortgage Act or Act 5/2019 of March 15 has changed the way you apply for a mortgage in Spain. In this article, Baco Advisor explains the stages of the new mortgage application process and what to expect. With this information you can be sure that your Spanish mortgage calculator is correct.

The basics of applying for a Spanish mortgage

Although the process is slightly different, don't be intimidated when you think about getting a mortgage in Spain. Applying for a Spanish mortgage follows the same pattern as most other European countries.

First and foremost, lenders want to make sure their investments are sound. This means that you must comply with various requirements. First, the mortgage lender must verify that you have enough regular income to make monthly payments. Second, they also want to make sure you have an acceptable deposit;

In Spain this is approximately 20% to 30% of the property's value if you are a resident and 30% to 40% if you are not a resident. Keep in mind that you will also need to pay sales tax and any purchase fees.

After the lender checks your data, they must give you a binding offer. The lender will then ask you to sign an acceptance of the mortgage terms at their branch.

This condition then forms a mortgage contract, which is signed at the notary together with the sale and purchase agreement.

How the new law has changed the process

Mortgage law in Spain is designed to protect the interests of the applicant. One of the most immediate benefits is that the lender has to pay most of the costs associated with the mortgage. This includes stamp duty, gestoría, notary fees and land registration fees.

Mortgage lenders must now adhere to a European template which makes it easier to understand bids and compare banks. Banks are also required to provide additional documents stating not only the terms offered, but also a general record of how mortgages work and the requirements for seeking professional advice in addition to the bank and associated fees.

The biggest change brought about by the new law is the requirement for applicants to sign documents proving that they have received the necessary advice from the bank. These documents are then uploaded to an online platform that records the date. The notary then downloads the documents, examines them and draws up a mortgage deed on this basis.

The mortgage deed can be signed after at least 10 days. Within that time and at least one day before signing, the applicant must visit a notary to sign the "Acta", which is a pre-existing deed. The customer must sign these documents without the presence of a bank representative.

The customer will be asked if he has received all the required information and whether he agrees to the terms.

Acta contains a questionnaire that mortgage applicants must complete in front of a notary to demonstrate that they understand the terms of the mortgage correctly. The next day, they can return to the notary for the final signing of the mortgage contract, this time before the bank.