How to apply for a mortgage from your bank: a step-by-step guide

Keys before applying for a mortgage from the bank

Before requesting a mortgage loan — from the bank of your choice — it’s important to understand some basic concepts that can help you avoid mistakes later on.

What is a mortgage and how does it work?

A mortgage is a long-term loan that a bank grants to help you purchase a property. You agree to repay the borrowed amount through monthly installments, which include interest, over an agreed period. Failing to meet the terms of the agreement could result in foreclosure.

What types of mortgages exist?

To understand which type of mortgage you can apply for, it’s necessary to first understand what interest rates are. These are the percentages banks charge for lending money, calculated based on the remaining balance of the loan.

Interest rates can fluctuate due to various factors, such as decisions made by the European Central Bank (ECB), and they define the main types of mortgages:

Fixed mortgage

In this case, the interest rate remains the same throughout the life of the loan. No matter what happens in the market, your monthly payment will stay constant. This type of mortgage is ideal for those seeking stability.

Variable mortgage

As the name suggests, the interest rate can vary depending on benchmark indices such as the Euribor. The Euribor is the rate at which major European banks lend money to each other and is used as a reference for many mortgages.

Because the rate changes, your monthly payments may increase or decrease over time, introducing a level of uncertainty.

Mixed mortgage

This type of mortgage offers fixed rates during the first few years, after which it shifts to a variable interest rate. The length of each period must be detailed in the agreement signed with the bank.

Young mortgage

If you’re under 35, you may qualify for special youth mortgage programs. These mortgages typically offer more flexible conditions to help you purchase your first home. In many cases, the interest rate is lower, and financing may cover up to 90% or even 100% of the property's value, depending on the bank and individual situation.

At Engel & Völkers, we collaborate with over 100 lending institutions to help you find the mortgage agreement that best suits your needs. Get in touch with our team and start your journey toward owning the home of your dreams.

Requirements for applying for a mortgage in Spain

To apply for a mortgage loan from a bank in Spain, you must meet certain requirements and provide the necessary documentation.

What do banks look at when granting a mortgage?

Income and job stability

The bank needs to ensure that you’ll be able to comfortably pay the monthly installments. Having a permanent employment contract and a stable, high income will significantly increase your chances of approval.

Debt level

Your existing debts and loans are also taken into account. If you already make several monthly payments, the bank may reject your application to avoid potential defaults. It's advisable to reduce or eliminate debt as much as possible beforehand.

Available savings

Banks typically finance between 80% and 90% of a property’s purchase price, so you’ll need to have at least 20% in savings, plus an additional 10–15% to cover associated costs like taxes and legal fees.

Credit history

If you’ve had loans in the past, the bank will review your repayment history — whether you’ve made payments on time and met all obligations.

Owned assets

Owning assets in your name will strengthen your financial profile. The bank will look at whether you own a car, another property, investment funds, savings, or any other financially valuable assets. These serve as financial backup if needed.

What documentation does the bank need for a mortgage?

Banks generally ask for the following documents:

• Personal ID: or NIE (if you are a foreigner).

• Employment contract, recent payslips, and an up-to-date employment history certificate.

• Latest income tax return.

• Proof of additional income (e.g., rent from another property).

• Account balance certificates from other banks, if applicable.

• Information about any existing loans or debts.

• Property-related documents — a simple registry report is useful.

• The reservation agreement, if it has been signed.

Working with a real estate agent from Engel & Völkers can greatly simplify the process, as they can guide you in gathering the correct documents and ensure everything is in order for your mortgage application.

Requirements for a youth mortgage in Spain

There are special mortgage programs and assistance available for young homebuyers. If you’re under 35 and want to purchase a home, some banks offer up to 100% financing — depending on the specific bank and your profile. To qualify, you must meet the following requirements:

• Be between 18 and 35 years old.

• Be buying your first primary residence.

• Have stable, provable income (a guarantor may be required in some cases).

• Have savings to cover at least 10% of the costs.

Additionally, some regional governments in Spain offer financial assistance for young buyers, including public guarantees or specific grants. Exploring these options can help you reduce the upfront cost of your mortgage significantly.

Step by step to apply for a mortgage from your bank

Once you're sure the time is right to buy your new home, follow these steps to apply for a mortgage and make the process smooth and secure:

Calculate how much you can afford to pay

Before choosing a home and applying for a mortgage, take a close look at your finances and consider:

• Your monthly income and expenses.

• Savings available to formalize a reservation contract.

• Additional purchase costs like notary fees or taxes.

• Your current level of debt.

Prepare the documentation to apply for the mortgage loan

Be proactive and gather all personal, financial, and property-related documents that the bank will need to assess your application and determine whether it can be approved.

Compare conditions of different banks

Each bank has its own conditions, interest rates, and product packages. Don’t accept the first offer you receive—visit other banks and repeat the process. You might find differences that benefit you, especially in products like home or life insurance.

Submit your mortgage application

Once you’ve chosen your preferred option, submit your application either in person or online, depending on the bank. The institution will notify you of its final decision within a few days—either approval or rejection.

Home appraisal

If the bank pre-approves your mortgage, it will send a certified appraiser to determine the actual market value of the property. Afterwards, the bank will provide you with a personalized document containing all the loan details—known as the European Standardised Information Sheet (ESIS, or FEIN in Spanish). You’ll have 10 days to review and accept the conditions.

Tips to increase your chances of approval

Even if you meet the basic requirements to apply for a mortgage, you can take these steps to improve your chances:

• Improve your financial profile: Increase your savings in the months before applying, cut unnecessary expenses, or enhance your employment situation.

• Pay off existing loans: If you have monthly payments for a car, another home, or a personal loan, consider waiting until you're in a better position to take on a mortgage.

• Apply for a realistic loan amount: Ideally, choose a mortgage that allows you to live comfortably and without financial stress.

As you can see, applying for a mortgage can seem complex without expert guidance. At Engel & Völkers, we help you find the home of your dreams and the mortgage that best fits your needs. Contact us and make the home you've always dreamed of a reality.