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Mortgage Financing in Spain

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Why Is a Property Valuation Required by Spanish Banks to Grant a Mortgage in Spain?

Why Do Spanish Banks Not Finance a Percentage of the Purchase Price, but Rather a Percentage of the Value Determined by the Property Valuation Company?

This is a point that many foreign buyers misunderstand.

When an foreign buyer wishes to finance a property in Spain, they quickly discover a major difference compared with their banking system

In Spain, the bank does not rely solely on the property’s purchase price.

Before granting a mortgage, the bank requires an independent property valuation, carried out by a valuation company approved by the Banco de España, in order to determine the mortgage value of the property that will serve as security for the loan

This step is essential because it directly affects the proportion of the purchase price that the bank will agree to finance.

What Is a Property Valuation in Spain?

The tasación is a property valuation carried out by a valuation company that is approved and supervised by the Bank of Spain, but independent from the lender — the bank.

Its purpose is to determine an objective, long-term value for the property, taking into account in particular:

      • its location;

      • its floor area;

      • its condition and state of repair;

      • its legal and planning status;

      • comparable property transactions in the local market;

      • the property's technical characteristics.

    Property valuation companies are subject to a stringent regulatory framework and are supervised by the Bank of Spain. https://www.bde.es/wbe/es/supervision-y-regulacion/supervision/sociedades-tasacion/

    Each report is subject to several levels of review in order to ensure its reliability.

    These valuation companies publish market reports and explain the valuation methods used for mortgage lending. For example, TINSA ESPANA https://www.tinsa.es/

    Why Do Spanish Banks Require a “Tasación”?

    The answer is easy:

    The bank wants to determine the property's true long-term mortgage value, as it will serve as security for the mortgage loan.

    En cas de difficulté de remboursement de l’emprunteur, c’est ce bien qui permettra à l’établissement bancaire de récupérer tout ou partie du capital prêté.

    The *tasación* therefore constitutes a fundamental element of the bank's risk management process.

    Purchase price and valuation : It's not always the same thing

    Many buyers assume that: Purchase price = the value accepted by the bank.

    But this is not always the case.

    Let's look at an example:

        • Purchase price : 300.000 €

        • Valuation : 280.000 €

      If the bank finances 70%, it will calculate the loan based on €280,000 and not on the purchase price paid by the buyer.

      The maximum amount of financing will therefore be:

      280 000 € × 70 % = 196 000 €

      The buyer will therefore need to provide a larger personal contribution (deposit).

      Conversely, a *tasación* value that is higher than the purchase price can sometimes improve the financing terms, but not automatically…

      The Concept of "Mortgage Lending Value"

      One of the most interesting aspects of the Spanish system is the use of the concept of Mortgage Lending Value.

      Unlike the simple market value, which may fluctuate according to supply and demand, the Mortgage Lending Value aims to determine a prudent and sustainable long-term value of the property.

      European standards define it as a value that takes into account:

          • the long-term sustainability of the property;

          • its future marketability;

          • normal market conditions;

          • its current use;

          • its potential uses.

        This approach is intended to limit the risks associated with fluctuations in the property market.

        An Evolving Spanish Regulatory Framework :

        In 2025, Spain adopted the new Order ECM/599/2025, which modernises the rules governing property valuations. https://www.boe.es/buscar/pdf/2003/BOE-A-2003-7253-consolidado.pdf

        Among the main changes:

        The integration of ESG criteria:

        The growing importance of the Energy Performance Certificate (EPC)

        Valuations must now place greater emphasis on:

            • the property's energy performance;

            • environmental risks;

            • the building's sustainability;

            • sustainability criteria.

          The Energy Performance Certificate (EPC) is playing an increasingly important role in property valuation reports.

          The aim is to better assess the impact of the property's energy efficiency on its future value.

          Increased transparency:

          Les nouvelles règles renforcent également :

              • the rationale for the comparable properties used;

              • the identification of the sources used;

              • the quality of the reports;

              • the traceability of the information used.

            The professional association representing valuation companies regularly publishes statistics and market studies. For example, the Spanish Association of Valuation Analysis (AEV) provides market reports and valuation observatories on its website: AEV – Asociación Española de Análisis de Valor.

            According to the AEV, the number of mortgage valuations increased by 16% in 2024.

            Why Does This Directly Affect Buyers?

            Parce qu’un refus de financement en Espagne ne provient pas toujours du profil de l’emprunteur.

            In some cases :

            -the valuation is lower than the purchase price;

            -certain urban planning irregularities are identified;

            -the property's actual floor area differs from the information recorded in the cadastral register;

            -mandatory documents are missing;

            -certain characteristics reduce the valuation adopted by the bank.

            A buyer may therefore have a very strong financial profile and still find that the amount they can borrow is limited by the outcome of the tasación.

            Conclusion

            The valuation is far more than a simple banking formality

            It is one of the cornerstones of the Spanish mortgage system and directly determines the amount that a bank will be willing to finance.

            Understanding how the tasación works before signing an Arras contract is often key to avoiding unpleasant surprises and ensuring a secure property purchase in Spain.

            In Spain, successful negotiation does not depend solely on the purchase price. The value accepted by the bank will be the one resulting from the tasación, and this is what will determine the maximum amount of financing.

            Are you thinking to purchase in Spain ?

            OPENNESS By CARLOTA carries out a personalised feasibility pre-assessment in order to evaluate: [https://opennessbycarlota.com/pret-immobilier-en-espagne-pour-un-non-resident-c/](https://opennessbycarlota.com/pret-immobilier-en-espagne-pour-un-non-resident-c/)

                • votre capacité d’emprunt ;

                • the level of personal contribution required;

                • Spanish bank's criteria

                • the potential impact of the tasación on the amount you may be able to borrow.

              A bespoke service designed specifically for non-resident buyers looking to secure their property investment in Spain.https://opennessbycarlota.com/achat-immobilier-en-espagne-les-services-openness/

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