While buying property outright is always the best bet to avoid increasing your debt commitments, this isn't always an option for Brits buying Spanish property to live in, holiday in or rent out.

Spain has a variety of interest rates available from Spanish lenders like Solbank and a few UK based lenders like Barclays, in both euro and stirling. If you are buying on a development, the company may already have an established partnership with a bank which will give you favourable interest rates, as Taylor Woodrow de España has just announced with La Caixa.

Variable interest rates are the most popular with the Spanish, with around 97 per cent of mortgages falling into this category. However fixed rate mortgages are available. With all banks there is a 1-2 per cent arrangement fee.

In Spain if the property you want to buy is already mortgaged you have two options. One, a novation (novación) entitles you to accept the existing mortgage and renegotiate with the lender better conditions. A subrogation (subrogación) entitles you to change the actual lender for another, and obtain a new mortgage loan on the property, with better interest rates.

In a typical Spanish sale you will pay an initial deposit and sign a preliminary contract (compra venta), and pay a proportion of the purchase price of at least 10 per cent. This legally binding contract clearly states the date of completion.

All transfer taxes and fees are paid to the tax offices. The notary will then register the transfer of ownership at the land registry (registro de la propiedad). If you want a copy of the records from the notary ask for a request of extract (copia simple). The mortgage is then be formalised on a public deed, which is signed before the notary. It is your right to examine the deed project at least three working days before the final deed is to be titled.

All parties involved must be present at the moment of the deed signature. The borrowers should examine the mortgage conditions, especially when the mortgage interest is variable.

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Read other articles about Spain:
From Spain's Costa Calida to Costa Brava
Property bargains in the Spanish Costas
Spain attracting young homebuyers

Article first published 21st July 2006