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Gran Canaria estate agent. Best seller. I work with foreign buyers ans sellers.

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I’m Laura Leyshon and I’m Las Palmas’ resident property expert.  I work for RE/MAX Cony Overseas, one of the city’s oldest estate agencies and the first RE/MAX office to open in Europe. Cony Overseas has an excellent local reputation and has helped hundreds of foreign buyers and sellers in Las Palmas and all over Gran […]

You are here: Home / Gran Canaria Property Articles / BUYING GRAN CANARIA PROPERTY / Gran Canaria Delays Expected Due To New Spanish Mortgage Law

Gran Canaria Delays Expected Due To New Spanish Mortgage Law

June 11, 2019 by Laura Leyshon

A new Spanish mortgage law comes into force on Monday 17 June 2019 and brings Spanish rules into line with EU consumer protection regulations. But will the banks respond with an increase to mortgage rates?

A new Spanish mortgage law comes into force on Monday 17 June 2019 and brings Spanish rules into line with EU consumer protection regulations.

It is expected to cause short delays to Gran Canaria mortgage applications and property purchases in July as banks, notaries, gestorias and estate agencies change their procedures to fit the new rules.

The main effects of the new Spanish mortgage law in Gran Canaria and across the Canary Islands are as follows…

Banks now pay most expenses associated with getting a mortgage

Property buyers still have to pay for the tasación, or official property valuation.

However, from now on the bank  must pay for all other expenses associated with mortgage applications; : the Legal Acts Documents (AJD) tax, notary fees, registry expenses and gestoría costs. These costs add up to well over 1000 euros, more in the case of high value property.

Buyers still pay property purchase tax (ITP) which is currently 6.5% on second hand property in the Canary Islands.

Evictions due to mortgage default is now much more difficult

Spanish banks cannot foreclose on a mortgage until a client has missed a minimum of 12 repayments, or repayments that add up to more than 3% of the mortgage principal. In the second half of a mortgage this rises to 15 repayments and 7% of the principal.

The mortgage application process is now more transparent

The client now has a minimum of 10 days to analyze the pre-contractual information given by the bank before signing the mortgage papers. The notary must explain all the details in advance.

This mandatory 10-day period will make some purchase processes longer for buyers.

Clients can choose a notary & associated insurance products

Bank clients can choose a notary rather than having to use the one selected by their bank.

They can also shop around for associated products, such as home insurance, life insurance and pension plans.

There is still some debate about how this will work.

Floor clauses on mortgage interest rates abolished

Spanish banks can no longer set a minimum interest rate for mortgages. The minimum rate is now set at 0% to prevent the banks from having to pay you for having a mortgage if the Euribor drops below zero.

Clients can choose a valuation company or professional valuer

Banks can no longer insist that their mortgage clients use their approved valuation company (tasador). Individual valuers certified by the Bank of Spain can now also carry out mortgage valuations.

Commissions down but will mortgage rates rise?

There is concern that while these measures save money for people taking out a Spanish mortgage, the banks will recover their losses by increasing their interest rates they set when making a mortgage offer to clients.

Read my guide for complete info on getting a Gran Canaria mortgage in 2019. 

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Laura Leyshon
Laura Leyshon
Gran Canaria Estate Agent at Las Palmas Property
I'm Laura Leyshon and I help foreign property buyers and sellers in Gran Canaria. I work with RE/MAX Cony Overseas, one of the island's oldest and most prestigious agencies, and I offer a complete, professional service with a personal touch. If you want to buy or sell property in Gran Canaria and want to work with one good agent, please get in touch.

Filed Under: BUYING GRAN CANARIA PROPERTY Tagged With: Canary Islands mortgage 2019, Gran Canaria mortgage, Spain mortgage rules, Spanish mortgage law 2019

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I'm Laura Leyshon and I help property buyers and sellers in Gran Canaria. I work with RE/MAX Cony Overseas, one of the island's oldest and most prestigious agencies, and I am one of Spain's top-performing estate agents. I offer a complete, professional service with a personal touch. Please get in touch for a free consultation or property valuation. Read More…

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