Leading independent mortgage broker for Spain and Portugal
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Welcome to our April newsletter. We hope you all had a successful first quarter. January was our busiest month in the 13 years since Mortgage Direct started (in terms of the number of mortgage enquiries) and February and March have also been very busy with enquiries at around 80% of the level received in January. Our conversion rate from enquiry to sign-up has been very consistent, which is encouraging given the uncertainty around Brexit.
On the subject of Brexit, earlier this month one of our founders, Kevin Monger, was asked to provide comments for the Daily Telegraph. In the article, “Will Brexit affect buying in Europe?” (Article by Liz Rowlinson, Saturday 16th April edition) confirms that “the numbers of Britons buying there [in Spain] increased by 12 per cent between 2017 and 2018, according to the Spanish Land Register.” Kevin also commented that the number of buyers taking out mortgages to mitigate the poor exchange rate has increased dramatically following the referendum. “This allows buyers to hedge their currency risk and the impact of Brexit on the value of sterling. If their aim is to pay down the mortgage at a time when the value of sterling is more favourable, there are mortgages with very low or zero early-repayment penalties.”
Mortgages for retirees and clients over age 60
We are arranging more and more mortgages for retired clients and clients over the age of 60. Clients who are still working but are near state retirement age will usually have to prove they have a suitable pension in place (even if they intend to carry on working). For those already in receipt of a pension, the bank will treat this income in the same way they would a salary, with the benefit to the bank that the income is often guaranteed for life and thus less risky.
We have recently started to work with a bank that offers mortgages to age 80 (for non-residents) compared with all the other banks we work with who run their mortgage terms to age 70 or 75. For some clients, this extended term – and thus reduced monthly payments - can make the difference between passing or failing the bank’s affordability stress test.
For all clients, the option to extend the term beyond age 70 or 75 will keep the payments down or the client can borrow more while keeping the same monthly payment that would have been expected on a shorter term. We are often asked about interest-only mortgages and while these are not offered in Spain, having a longer term can reduce the payments closer to what they would be on a shorter interest-only mortgage.
Rates start from 1.7% fixed (for 10 years) and 2.65% fixed (for 30 years) and life cover is not mandatory for non-residents - a very attractive feature of this product. Sometimes the mortgage can go past age 80 (if the client’s partner is younger) and for premium clients, the bank fee can be as low as 0%!
Please get in contact if you have a client to recommend. Thank you.
For any mortgage-related enquiries, please don’t hesitate to get in contact
with Katherine by calling her on +34 695 706 749
Mail Katherine for a mortgage enquiry
Up to 70 % for non-residents
Up to 80 % for residents
Variable interest rates
From Euribor + 1.6% = 1.6%
Current Euribor -0.121%
Fixed interest rates
From 2.15% for the whole term (20 years). Terms up to 30 years