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Owners rental advice > Buying to Let > How Can I Finance A Holiday Home?

How can I finance a holiday home?

Financing a Spanish holiday homeFinancing a holiday home in Spain is easier than ever before with many banks now offering euro mortgages to both residents and non-residents of Spain. Residents of Spain can normally borrow up to 80% of the property value as a mortgage whilst non-residents are limited to 70% of value. It is always wise to add around 10% - 12% to the agreed price to allow for all the costs involved during the purchase.

As with any large financial outlay, you should discuss your plans with an independent financial adviser who can guide you to the best mortgage for your individual circumstances.

Other important things to consider when buying a foreign property as a holiday home are the tax implications and the general running costs that are associated with the property.

Purchase costs involved will include:

  • Purchase price

  • Mortgage arrangement fee (if applicable)

  • Currency transfer fees (if applicable)

  • Legal fees

  • Notary fees

  • Any survey fees incurred

  • Local taxes

  • Agent's commission (normally included in purchase price)

Running costs will include:

  • Community fees (if applicable)

  • Mortgage payments (if applicable)

  • Currency transfer fees (if applicable)

  • Annual taxes

  • Insurances - buildings, contents, etc.

  • Marketing costs (if applicable)

  • Rental agent fees (if applicable)

  • Management company fees (if applicable)

  • Utility bills

When purchasing a holiday home as a buy to let, you should consider at least the annual running costs in the list above. Whilst this list is not exhaustive, it gives a general guide as to the sort of costs you should be thinking of and what your rental income may need to cover before you reach a break even point.

If you need to transfer money to Spain on a regular basis for monthly mortgage payments for example, it is wise to use the services of a specialist currency exchanger as their fees are, in many cases, lower than the majority of banks and they can often obtain a better exchange rate which means your money will go further. We have teamed up with Currencies Direct who will transfer your money to your bank account in Spain FREE of charge.

To see how Currencies Direct can help you, click their logo here   Currencies Direct