Buy real estate in Mallorca with financing
Buy a property in Mallorca
There are many reasons why it could be interesting to buy a property in Mallorca. Whether it is for personal use, or as an investment to earn a lucrative return, Mallorca has the perfect real estate market. Once you have chosen the right region and the type of property (whether you want to buy a house or an apartment), you should be sure how much money you want to spend. For this, many buyers also consider financing, as it allows you to use part of the future income for the current real estate purchase….
Where finances man in Mallorca?
There are generally two options to seek financing for the purchase of real estate in Mallorca. On the one hand, Mann can go directly to the bank and take out a mortgage there, or Mann hires a specialized company that checks out all the banks and conditions for us with a power of attorney. Both options have advantages and disadvantages.
1. finance with the bank
You have a wide choice in Mallorca, and now in almost every office there is also a multilingual person who can perfectly explain all the conditions as well as requirements. However, the perfect bench for you depends on a few factors, such as:
- Purchase price range: How much will the purchase price be? And what % funding of that do you need?
- Contacts in Germany/abroad: There are some banks that also have branches abroad. This makes many bureaucratic steps easier, especially in the beginning when you are still “commuting”.
- Online readiness: do you prefer to settle your affairs on-site in the office, or rather online from your online banking account?
- Conditions: is the focus on a low interest rate? Or is it more important to get the funding itself, with difficult conditions?
2. hire a specialized company
This is the easiest option, as Mann does all the work, and professionals take care of matching all market offers and finding the best conditions for you. The downside, of course, is that this service has its price and you pay a commission for it (sometimes only at the end after completion, sometimes a part at the beginning and the rest after completion).
The third option: finance with a German/foreign bank
It is generally difficult these days to finance a property purchase in Mallorca with a German/Foreign bank. Since the German/foreign banks are not specialized in the foreign market, they usually do not want to take the risk with financing.
If you do get financing, it usually looks like this: Annuity loan for 10 years with a fixed interest rate. After the 10-year fixed-interest period, a residual debt remains that can either be paid off or financed further with a final financing.
Contact person in Mallorca for financing
Banks in Mallorca
Santander
One of the largest banks in the world, and with branches abroad as well. A solid and large bank that has been on the stock market for many years, and has always left a safe impression. Santander Bank is generally among the banks with the best conditions in terms of low interest rate, mixed with a high security of the bank itself.
Banca March
A self-financed bank with a lot of tradition in Spain, and especially in Mallorca. Banca March is one of the most conservative banks, but also one of the most risk-free. This results in more security on tougher terms. The bank does not take unnecessary risks, and are focused on solid and well-off customers.
La Caixa
La Caixa has long been considered the bank for the young, with low commissions and a user-friendly online banking interface. Comparably low interest rates and good conditions even for younger people, makes this bank one of the favorites in Mallorca.
Sabadell
One of the more traditional banks with all kinds of services, and depending on the conditions and purchase price, good offers for financing when buying a property in Mallorca.
There are, of course, other banks…
We will be happy to help you choose your bank in Mallorca
Specialized companies in Mallorca
Lionsgate Capital
Probably the best known mortgage broker company in Mallorca. The experts will contact over 30 banks for you and negotiate hard to get them the best terms. The multilingual team adapts exactly to their wishes and is always ready to advise.
Mallorca Mortgage Consultancy
Another mortgage broker in Mallorca with a lot of experience and a good team of experts.
Factors that determine their financing
What does your financing depend on? How do I get higher % financing? How do I get the best interest rate? Here are some factors:
- Equity: the more equity you have, the better conditions the bank will agree to.
- Fixed interest rate: this can be particularly worthwhile if interest rates are low at the time of financing. With a fixed interest rate, a small premium is usually added by the bank the longer the financing runs.
- Repayment: this is the amount that is repaid annually. If you pay a high amortization, you can take a shorter financing and end up paying less interest.
Conclusion on the subject of real estate financing in Mallorca
Our conclusion after years of working in the real estate sector, hand in hand with clients who wanted to (and did) finance their real estate purchase here on the island, we can only recommend to get advice with a trusted local person. Depending on speed, complexity and available equity, one option may be better than the other.
If you have any questions, please feel free to contact us and we will advise you on the subject!