Setting your budget

Once you have established your maximum budget - taking into account mortgage repayments and any possible rent for the property you can off set against them - you need to consider the administrative and legal costs of buying a property in Spain. These amount to 10-11% of the house price to cover all taxes, legal and notary fees.

When it comes to getting a mortgage, you don't necessarily have to deal in Euros just because you are in Spain - Many banks offer mortgages in euros or sterling. If you intend to rent out the property, you will receive Euros, so it makes sense to take out the mortgage in Euros so you can offset the rent against repayments.

It is also advisable to have the asset (the property) and the liability (the mortgage) in the same currency to avoid possible losses due to fluctuations in exchange rates when you come to sell. Sticking to one currency for both limits the element of uncertainty.

Repayment periods are lower: 10-15 years in Spain is traditional, although some banks will allow up to 35 years. Maximum loan-to-values are also lower, usually around 60-80%. Some internet based lenders will offer 100% mortgages, although not for non-residents.

In theory, Spanish banks can grant a loan or mortgage to anyone - resident or not - on any property. In practice, Spanish banks have tightened up their lending criteria due to repayment problems in the 1990s.