How Spain’s new mortgage law in June 2019 affects property sales for exparts

The new mortgage law in Spain was passed on 17th June 2019.

On Monday 17th June 2019, a new mortgage law allows non-residents who apply for a mortgage in Spain to change it from the euro to their local currency at any time. Specifically, Article 20 of the Real Estate Credit Act (Ley de Crédito Inmobiliario) allows any future mortgages taken out by expats from countries outside the Euro zone, such as the USA and UK, to change their mortgage into another currency in two specific cases:

Do you want to know more?

Contact us for free advice


Case 1

If the currency in which the borrower receives most of their income or has the most assets with which to repay the loan is not the euro, as indicated at the time of the most recent credit assessment for the loan contract.

Mortgage clients with mortgages denominated in currencies other than the Euro have the right to convert their mortgage to Euros at any time. Additionally, banks must periodically inform their clients if their total debt increases due to currency fluctuations.

Case 2

If the above requirements are not honoured by the bank the contract will be considered void. Interestingly, the borrower could demand that their mortgage is converted to Euros retroactively and that all over-payments in the other currency be deducted from the pending capital of the mortgage.

Lenders can no longer force borrowers to purchase other products!


Spanish banks traditionally specialized in cross-selling different products. In the past, they required borrowers to purchase life insurance and home insurance before issuing a mortgage. Now, they must allow borrowers to accept insurance from external providers. Moreover, they cannot threaten to raise the interest rate if the insurance is issued by a third party.

We seek to become a national force for sustainable homeownership, reaching out to underserved clients and giving them the confidence they all search for.

Additional mortgage fees charged by the Banks

‘Floor clauses’ will be removed

Prior to Spain’s new mortgage laws, lenders put a floor on variable rate mortgages. Meaning if interest rates went up, they made more money but they were protected if interest rates fell. Now, the floor is 0 percent of the mortgage rate (not EURIBOR).

This provides additional protection for borrowers since mortgage interest rates are always higher than EURIBOR. This is particularly relevant in the current environment, where EURIBOR is currently in negative territory.