Mortgage Expenses in Spain 2025: Who Pays What?

Note: This content is specific to the Spanish property market. If you are a foreigner buying property in Spain, you might have heard horror stories about high closing costs. While taxes remain high, the mortgage setup costs have dropped significantly since the new Mortgage Law of 2019. Before 2019, the buyer paid almost everything. Now, the bank must pay the majority of the mortgage-related expenses.

Breakdown: Who Pays What?

1. Paid by the BANK (The Lender)

Notary Fees (Notaría): For the mortgage deed.

Registry Fees (Registro de la Propiedad): For registering the mortgage charge.

Gestoría (Agency): The administrative fees for processing the tax and deeds.

AJD (Stamp Duty): The "Impuesto de Actos Jurídicos Documentados" on the mortgage liability. This used to be a huge cost for borrowers, now the bank pays it.

2. Paid by YOU (The Borrower)

Appraisal (Tasación): You must pay for the official valuation of the property (~300€ - 500€).

*Tip: If you pay for it, you own it, and you can take it to any bank to negotiate.

Opening Fee (Comisión de Apertura): Some banks charge this (0.5% - 1%), but many online banks offer 0%.

Your Copy of the Deed: A small fee (~50€) for your personal copy of the contract.

The Elephant in the Room: The Purchase Taxes

While the mortgage is cheap to set up, buying the house is expensive. You still need to pay:

ITP (Transfer Tax): For second-hand homes. Varies by region (Community).

Madrid: 6%

Andalusia: 7%

Catalonia, Valencia, Galicia: 10%

VAT (IVA): For new homes (10%).

Understanding the Mortgage Law of 2019

The Mortgage Law of 2019 was a significant change in the Spanish property market. It aimed to protect consumers and make the mortgage process more transparent. One of the key changes was the shift of certain costs from the borrower to the bank. This includes notary fees, registry fees, and AJD (stamp duty).

Calculating Your Budget

When calculating your budget for Spain, allocate 10% to 12% of the purchase price for taxes and closing costs. However, don't let the bank charge you for the Notary or Registry of the mortgage loan itself—that's illegal now. It's essential to factor in these costs to avoid any surprises.

Tips for Borrowers

Always check the fine print of your mortgage contract to ensure you're not being charged for anything the bank should be paying.

Consider using an online bank or a mortgage broker to help you navigate the process and find the best deals.

Don't forget to budget for ongoing costs, such as mortgage payments, property taxes, and maintenance fees.

Regional Variations

While the Mortgage Law of 2019 applies nationwide, there are some regional variations to be aware of. For example, the ITP (transfer tax) rates vary by region, as mentioned earlier. Additionally, some regions may have their own specific regulations or fees.

Conclusion

In conclusion, buying a property in Spain can be a complex process, but understanding the mortgage expenses and who pays what can help you make a more informed decision. Remember to allocate 10% to 12% of the purchase price for taxes and closing costs, and don't let the bank charge you for anything they should be paying. With the right knowledge and planning, you can navigate the Spanish property market with confidence. 👉 [Spanish Mortgage Cost Calculator](/en/calculadora-gastos-hipoteca)

Key Takeaways:

The bank pays most mortgage-related expenses, including notary fees, registry fees, and AJD (stamp duty).

The borrower pays for appraisal, opening fee, and their copy of the deed.

Allocate 10% to 12% of the purchase price for taxes and closing costs.

Check the fine print of your mortgage contract to avoid surprise charges.

Consider using an online bank or mortgage broker to find the best deals.

Budget for ongoing costs, such as mortgage payments, property taxes, and maintenance fees.