Something worth knowing if you’re a non-resident buying on the Costa del Sol — not a horror story, just a mechanic of Spanish mortgage lending that’s worth having on your radar.
When you apply for a Spanish mortgage, the bank doesn’t lend against the price you agreed with the seller. It lends against its own valuation (the “tasación”) — and the loan is capped at the lower of the two figures. If the bank’s valuation comes in under the purchase price, your financing shrinks accordingly, even though nothing about the deal itself has changed.
This isn’t rare or exotic. It’s a structural feature of how Spanish banks lend, and it’s arguably more likely to surface right now than usual: valuations lean on historic comparable sales, and in a market like Marbella’s — prices up roughly 20% year-on-year — valuations can lag a fast-moving market by design.
It affects non-resident buyers more than residents, for two reasons. Non-residents typically get 60–75% loan-to-value instead of up to 80%, and need 30–40% in cash upfront rather than 20–30% — so there’s less cushion to begin with. And the deposit contract (arras) you sign doesn’t automatically protect you if this happens: whether you can walk away and recover your 10% depends entirely on whether the contract includes a financing or valuation contingency clause. Many don’t, by default.
None of this means don’t buy, or that it will happen to you. It just means it’s worth knowing before you sign anything, not after — this is fixed by how the deposit contract is drafted, not something you can renegotiate once a low valuation has already come back.
It’s one of the things we build into every purchase for our clients from the outset, working with our legal partners, rather than leaving it to be discovered at the worst possible moment.
Happy to talk through how this is structured for a specific purchase.
