How much can you borrow?

Like any type of mortgage, the amount we will lend depends on your income, other financial commitments and your financial history and the value of the property.

Euro Nominated Lending: Single applicant - Annual income less outstanding credit commitments x 5.25 For two applicants - First applicant’s annual income less outstanding commitments x 5.25 plus second applicant’s annual income x 1 OR Both applicants’ joint annual income less outstanding credit commitments x 4.5 Sterling Nominated Lending: Single applicant - Annual income less outstanding credit commitments x 3 For two applicants - First applicant’s annual income less outstanding commitments x 3 plus second applicant’s annual income x 1 OR Both applicants’ joint annual income less outstanding credit commitments x 2.5

 

One of our panel of qualified surveyors will carry out a valuation of the property and mortgages are available for up to 65% of the Valuation or Purchase Price, whichever is the lower. The minimum property value that we will lend against is £50,000/€72,500.

If the property is still being built, we may offer your mortgage in up to three stage payments - based on the recommendations of our surveyors. However, this option is only available if you own the plot on which the property is being built and is not available for apartments.

If you have opted for a sterling mortgage product, repayment is by sterling Direct Debit from a UK or Gibraltar bank or Building Society account. If you have chosen a Euro mortgage product, repayment is by Euro standing order from an appropriate bank or Building Society account.

How to repay your mortgage

We offer three ways of repaying your mortgage and we may be able to arrange a combination of these to meet your specific requirements.

Repayment mortgage (capital and interest)

With this type of mortgage you will repay a proportion of capital as well as the interest on a monthly basis. The entire sum borrowed together with the interest will be repaid over the term of the mortgage.

Life cover does not come as part of the mortgage so you might want to consider taking out a suitable policy to cover any outstanding loan in the event of death.

Endowment mortgage

The monthly repayments cover the interest charged over the term of the mortgage. You will also make monthly payments towards an Endowment Policy, which includes life assurance cover.

Interest only mortgage

Monthly repayments will only cover the interest charges. The capital amount of the mortgage will become fully repayable at the end of the term of the mortgage. This is usually covered through the proceeds of an investment set up by you. This might be a pension, endowment, ISA or an existing investment. You have the freedom to select how the capital amount will be repaid. You might also want to consider life assurance cover so that the amount is repaid in the event of death.

We strongly recommend you make regular checks with a Financial Advisor that the returns on you investment(s) will be enough to repay the capital at the end of the mortgage term.

Legal costs and fees

The legal process for buying a property in Spain is different from English law. You will need to cover the cost of all legal fees, taxes and related costs including legal costs incurred by the Society.

We will instruct a lawyer to act on our behalf. If you would like to use the same lawyer to act for you then get in touch with our Gibraltar office for details.

It’s wise to obtain estimates of all legal fees and expenses from your lawyer. Here’s an indication of likely costs:

• For a purchase
  
  Society lawyer acting solely for Society professional legal fee will be 0.5% of purchase price (Minimum professional legal fee charged will be €800)
  
  Society lawyer acting for both Society & applicants professional legal fee will be 1% of purchase price (Minimum professional legal fee charged will be €1,000)
  
  

• For a remortgage
  
  The professional legal fee will be 0.5% of purchase price (Minimum professional legal fee charged will be €800)

• Stage payment releases
  
  In addition to the above costs there will be extra costs and fees involved at the release of each stage payment.

• Repayment of your mortgage (either early repayment or on maturity)
  
  There will be legal costs incurred to cancel the charge against your property. These include legal fees, land registry fees, notary fees and local taxes.
  
  If you choose to repay your mortgage before the end of the term you may have to pay an early redemption charge. This depends on the type of mortgage you choose and it will be detailed in the Offer of Advance documentation.

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