Buying with a mortgage on Costa Blanca South: budget, valuation and timing

Start with your borrowing position

Ask the bank what evidence it needs for your residency status, income currency, employment or pension, existing debts and savings. Self-employed and overseas-income applicants should confirm document and translation requirements directly. There is no single financing percentage that this guide can promise every international buyer.

Banco de España explains that affordability is assessed alongside the property security. Compare the total cost, term, annual percentage rate (TAE in Spain) and any products required for a discounted rate. For a variable-rate loan, review payment scenarios as well as the first instalment. [1]

Check the valuation before relying on a loan figure

The lender’s calculation may depend on the accepted valuation. Banco de España states that a customer can supply an unexpired valuation from an accredited valuer; its validity is six months. The borrower pays for the valuation, and commissioning one does not guarantee approval. Ask for an initial viability assessment before incurring that cost. [2]

Have your independent solicitor check the title, registered description and any alterations separately. A valuation does not replace legal due diligence. Resolve discrepancies while the bank still has time to review the specific home.

Calculate the cash gap with a cautious example

Suppose the agreed price is €300,000 and, purely for illustration, a lender limits this loan to 70% of an accepted €270,000 valuation. The loan would be €189,000; your contribution to the price would be €111,000 before purchase taxes and fees. The 70% assumption is arithmetic, not a current offer or a standard lending ratio.

Add separately quoted purchase costs and a reserve for moving, repairs and ownership. For a new build, map every staged payment against available cash and ask when the mortgage would actually be drawn. Do not assume a completion loan will fund an earlier reservation or construction instalment.

Match the purchase contract to the mortgage timetable

Before paying a reservation or signing arras, ask your solicitor what happens if financing is refused, delayed or reduced after valuation. Any protection depends on the agreed contract; do not assume a deposit is automatically refundable.

For residential mortgages covered by Law 5/2019, the required pre-contract documents, including the personalised FEIN offer, must be supplied at least ten calendar days before signing. The free prior notarial advice and act must be completed no later than the previous day. Confirm the actual schedule with your chosen notary. [3]

The law assigns the valuation to the borrower and the mortgage-deed notary, registry and gestoría costs to the lender. This does not mean the bank pays the taxes and expenses of buying the property itself. Request separate purchase and mortgage cost breakdowns. [3]

Use the confirmed budget to compare local homes

For each shortlisted home, add community fees, IBI property tax, insurance and maintenance to the mortgage payment. Consider how a change in interest or exchange rates would affect your own budget. A lower advertised asking price alone does not establish a more affordable home.

Compare San Miguel de Salinas, Torrevieja and Orihuela Costa using the same cash and monthly-cost worksheet. Verdi Estate can help with the property search and available property documents; the lender decides the loan and your independent solicitor advises on the purchase contract.