The difference in interest rate has a direct impact on the amount of the monthly loan installment. According to experts from the Bright Real Estate agency: for a loan of PLN 500,000 the euro installment may be lower by almost a thousand euros per month compared to financing in Poland. Over the next 20 years, this will save almost PLN 240,000. euro — an amount that in itself could constitute an own contribution to another property.
The difference in interest rates is crucial for investors buying rental properties. A property worth one million euros on the Costa del Sol can generate short-term rental income of 6-10%. annually.
— With Spanish financing, where the loan installment is a smaller percentage of this income, the investment generates positive cash flow almost from the first month – says Joanna Ossowska-Rodziewicz, co-owner of the By-Bright real estate agency.
According to calculations by the Bright Real Estate agency, a client buying an apartment for PLN 800,000 euro with a 60% loan. values at 3.5 percent The interest rate is approximately EUR 2,150 per month. If a property rents on average for €4,000 in high season and €2,000 in low season, the average monthly income is €3,000. After deducting the installment, management costs and taxes, the property is repaid by rent.
Lower commissions and no additional insurance
Spanish mortgage loans also offer other advantages. The lack of mandatory insurance for a low own contribution and lower bank commissions additionally reduce the total cost of the loan.
— In Spain, the maximum preparation fee is 1.5%, but it is often possible to negotiate 0.5%. or even its complete abolition – says Marc Elliott, a mortgage broker with 20 years of experience on the Spanish market, founder of Fluent Finance Abroad. — In Poland, commissions reach 2-3 percent. loan value, which for larger amounts means tens of thousands of zlotys of additional costs – he adds.
High requirements for borrowers
Although the offer seems attractive, Polish buyers must meet a number of criteria. Due to the EU Mortgage Credit Directive, most Spanish banks do not have the operational capacity to service loans in PLN, which limits the market to only 4-5 financial institutions.
For non-residents, financing up to 60% is standard. real estate values. This means an absolute requirement to have 40 percent. own contribution in cash, plus additional funds for transaction costs, mainly taxes, notary and registration fees.
Equally important is the debt ratio limit of 35%. monthly net income. All existing liabilities in Poland are included in this calculation – mortgage installments, car leases, credit card debt and other loans.
— The system is not designed for the typical leverage maximizing investor – emphasizes Marc Elliott. — Spanish banks are looking for people with high, stable income who… at the same time, they have significant cash surpluses and a low level of existing debt – emphasizes the expert.
Additionally, the maximum age of a non-resident at the end of the loan period is approximately 75 years, which is a significant barrier for older investors planning long-term financing.
In the current geopolitical and economic situation, when Poles are looking for safe locations for their capital, the difference in interest rates may be a factor in choosing Spain instead of Poland as an investment destination.
However, this is an option for well-capitalized investors, as a minimum of 40% is required. own contribution, low debt in Poland and stable income.
