Keys to financing a second home
The boom in home sales has not left second homes unaffected, a market also seeing an increase in transactions. These types of properties represent around 13% of all purchases, according to a CaixaBank Research report published at the end of 2024. The main stumbling block for households aspiring to own an apartment or summer house is financing, as credit conditions are stricter than for a primary home.
Despite this, interest in this market is growing. Jordi Cid, general manager of business at the real estate platform Housfy, states: "We have detected a clear upward trend in mortgage applications for second homes this year, which have increased by 15% compared to 2024." However, buyers should keep in mind that there are certain aspects that differentiate the purchase of a second home from that of their first home, especially when they do not have sufficient solvency to pay cash.
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First, Cid argues, because banks "usually finance up to 70% of the property's value," compared to the 80% they typically grant for the purchase of a primary residence. In specific cases, they can finance up to 100%.
Secondly, the maximum repayment term for a mortgage loan "usually ranges between 20 and 25 years," compared to the 30 years or more that financial institutions are willing to offer to someone buying their first home. And thirdly, the cost of the loan is usually somewhat higher.
Mortgage offer The interest rate applied to second home mortgages is close to 2%.Industry sources explain that the conditions for these types of transactions are stricter because there's a greater likelihood that the buyer, should they encounter financial difficulties, will default sooner on their vacation home loan than on their first home. For all these reasons, mortgages for first homes "come with more attractive prices," comments Ricard Garriga, general manager of Trioteca.
Mortgage loans granted through this broker are being signed at an average nominal interest rate of 2.21% at a fixed rate, after discounting bonuses for products such as home and life insurance, or direct deposit of payroll. For "very creditworthy" client profiles, the cost of the loan is lower.
Coastal areas attract the most interest in purchasing a holiday home.
Europa PressIn any case, notes Joaquín García, a mortgage expert at Wypo, "interest rates are around 2%," although he admits that the most favorable terms are for high net worth individuals, a common economic profile among non-resident buyers in Spain. These clients are looking for homes with "higher prices and are more attractive to banks." In tourist destinations such as Alicante, Santa Cruz de Tenerife, and Málaga, more than a third of sales are made by foreign buyers.
The buyer's assets and solvency will also determine the percentage of the property the bank is willing to finance. For example, if the client has already finished paying for their first home and provides this as additional collateral, "you can expect to obtain up to 100% financing, including the renovations," adds Garriga. Otherwise, the buyer will have to cover 30% of the purchase price or appraisal value out of their own pocket, in addition to the associated expenses. It's important to remember that monthly debts should never exceed 35% of net income.
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