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Costs Explained

Once the mortgage is approved the bank will provide us with an estimate of all costs involved, which we will review and will include any additional costs related to the purchase. We will send you a detailed breakdown so you know the exact amount to transfer in preparation for completion. Please note as from June 2019 the banks cover most costs related to the mortgage.

In general terms, we recommend clients to estimate 10% to 14% of the purchase price for the costs, which include the following:

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Early Repayment Penalties

Although early repayment fees are not part of the initial costs, they are an important part of the negotiation as many of our clients prefer flexibility to repay the mortgage. Since June 2019, the new mortgage law states early repayment penalties must be 0,25% for the first 3 years or 0,15% for the first 5 years and 0% thereafter when there is a variable interest rate. With a fixed interest rate, the early repayment penalty is 2% for the first 10 years and 1,50% thereafter. Our aim is to always negotiate early repayment fees down to a bare minimum for all our clients.

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Administration Fee

The banks administrative department take care of registering the property and the mortgage and ensuring all fees and invoices are paid, including notary, registry and taxes. They eventually send you a copy of both deeds together with a copy of all the individual invoices, for this they charge between 400 euros and 600 euros for the purchase deed, depending on the bank.

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Insurances

Depending on the bank, home insurance and/or life insurance may be compulsory when applying for a mortgage. Other products sometimes apply, we always negotiate the best conditions and minimum number of products for our clients.

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Opening / Arrangement Fee

When arranging a mortgage, it is common for the lender to charge an opening or arrangement fee for setting up the mortgage, usually between 1% and 2% of the mortgage amount, we always strive to negotiate this fee for our clients too.

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Lionsgate Capital Fee

We save our clients substantial funds, on average 10% or more throughout the term of the mortgage. We offer a free consultation and work on a success fee of 1% of the mortgage (minimum fee: EUR 4.500,-) plus VAT.         If we are not successful nothing is charged! You have everything to gain by contacting us as we will save you substantial time, effort and funds.

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Land Registry Fees

As well as paying the property taxes, you will have to pay to have the property registered in your name. This cost also depends on various factors but can be estimated between 0,10% and 0,30% of the purchase price. The bank will cover the costs of the mortgage.

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Notary Fees

This cost depends on various factors but the total cost is normally between 0,10% and 0,30% of the purchase price. This cost is for the purchase deeds, as the bank will cover the costs of the mortgage.

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Cheques

Some banks charge to have the cheques issued. We always ensure this is the minimum amount and try to exempt this charge when possible.

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Surveys and Valuations

A survey or valuation is called "tasación" in Spain. It is not necessary to obtain a mortgage pre-approval to instruct a valuation, but once the application is pre-approved, a valuation of the property must be carried out and in most cases is paid for by the client. All valuations for mortgage purposes are regulated by the Bank of Spain and the surveyors must ensure the licenses for each property are in place and that the properties are legal and can be mortgaged. We highly recommend all clients have a lawyer to carry out their own revision so the clients are reassured. As always, we are happy to recommend good surveyors and lawyers if required.

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Taxes / Stamp Duty

In Spain, the amount of tax payable depends on the type of property and on the region where the property is located. For the purchase, this ranges between 6% and 11% for a pre-owned property (calculated on the taxable value of the property and the region).

For the purchase of a new property 10% VAT must be paid.

Additionally there is a stamp duty, which is between 1% and 1,50%.

Examples of the Costs in a Property Purchase

Following are a few examples of the breakdown of costs. Since June 2019 clients must only pay for the costs related to the purchase as the banks cover the costs for the notary, registry, administration and taxes related to the mortgage. Please bear in mind these costs are an estimate and can change as per each of the above mentioned points:

Purchase Costs €675.000 €1.000.000 €1.500.000 €2.000.000 €4.000.000
Notary €1.600 €1.800 €2.200 €2.400 €3.000
Registry €1.100 €1.600 €1.900 €2.200 €3.300
Property Tax €57.500 €90.000 €145.000 €200.000 €420.000
Administrative Costs €600 €650 €750 €850 €900
Total Purchase Costs €60.800 €94.050 €149.850 €205.450 €427.200
Mortgage costs The only applicable costs are the property valuation and arrangement fee
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