Financing property abroad: Pension income as the basis, €623,000 for a penthouse in Palma
Alongside their pension income, the buyers covered part of the purchase price from their own funds. The couple, both in their early 60s, had a secure income from pensions and private provision. In addition, there was solid securities wealth that was deliberately not to be liquidated entirely.
Penthouse in Palma: how much equity does a mortgage abroad usually need, including acquisition costs?
A mortgage to buy property abroad usually moves in a range of about 30 to 40 % equity including the acquisition costs. In this case the financing share was around 70 % of the purchase price, which corresponds to an equity ratio of around 30 %, and the additional costs were paid entirely from own funds.
In short
It can often be sensible to keep part of the assets invested and instead choose balanced financing.
Keeping part of assets invested can be sensible: It can often be sensible to keep part of the assets invested and instead choose balanced financing.
Arranged by Perini Finance & Property: Perini Finance & Property — German-speaking, operating under the §34i GewO licence held by Olga Nikushkina, Portugal through a locally licensed intermediary; 30+ banks approached per case. First call free; on completion 1 % of the loan amount.
€890,000 penthouse, €623,000 loan, €382,700 of own funds
The penthouse in Palma cost 890,000 €. The financing required was 623,000 € and the equity 382,700 €.
Purchase price: 890,000 €; Financing required: 623,000 €; Equity: 382,700 €.
Anonymised case figure · not a binding statement for other projects · §34i GewO
Typical, anonymised case. Names, places and individual financing figures have been adjusted to protect privacy. The process reflects a typical advisory situation for non-resident financing in Spain.
Property for sale in Palma: the wish for a new centre of life on the Mediterranean: After many holidays on Mallorca, a couple from southern Germany were sure that the next chapter of life should begin permanently on the island.
They were looking for a modern apartment in Palma – centrally located, with a generous terrace and a view of the sea. Good infrastructure, short distances to the harbour and the airport and the ability to use the property year-round themselves in future were important.
After several viewings, the decision fell on a high-quality penthouse in a well-kept residential complex.
Pensions and annuities carry the move to Palma
The couple, both in their early 60s, had a secure income from pensions and private provision. In addition, there was solid securities wealth that was deliberately not to be liquidated entirely.
As the centre of life was to be moved to Mallorca, durable financing was more important than the highest possible loan amount.
€1.01m total, €115,700 of fees paid from own funds: Purchase price: 890,000 €; Additional costs: 115,700 €; Total investment: 1,005,700 €; Equity: 382,700 €; Financing required: 623,000 €.
The financing share thus corresponded to around 70 % of the purchase price.
Documenting pensions from abroad, keeping cash free: Although sufficient equity was available, the question arose of how to use it as sensibly as possible. On the one hand, the additional costs were to be borne entirely from own funds; on the other, sufficient liquidity was to be preserved for the new start on Mallorca.
In addition, the regular pension income had to be documented traceably and partly evidenced from abroad.
Income sat well above the future monthly payment
First the entire asset and income situation was prepared in a structured way. This showed that the ongoing income was significantly above the later financing instalment.
As no sale of a previous property was intended, the financing could be prepared without time pressure. At the same time, care was taken to ensure that sufficient reserves for unforeseen expenses remained even after the purchase.
The equity ratio of around 30 % resulted in a balanced financing structure.
70 % on a long-term loan, the portfolio stays put: The financing was structured so that around 70 % of the purchase price was covered by a long-term loan.
The additional costs were paid entirely from own funds. A further part of the equity reduced the financing requirement without fully using up the existing reserves.
This kept the securities portfolio largely intact and able to remain invested over the long term.
Move to Mallorca without cashing in assets: The couple were able to acquire the penthouse in Palma as planned and prepare the move to Mallorca without having to liquidate existing assets entirely.
The monthly burden remained easy to calculate over the long term and suited their personal life planning.
Equity, reserve and loan kept in balance
For high-quality properties on Mallorca in particular, a solid equity base is often the key to sustainable financing. At the same time, not all of the assets have to be used. A balanced combination of equity, a liquidity reserve and financing creates long-term financial security.
Palma penthouse: a strategy linking assets, income and future plans: Buying a high-quality property in Palma requires not only sufficient equity but above all a well-considered financing strategy. Anyone who sensibly combines assets, ongoing income and personal future plans creates the basis for a relaxed start to life on Mallorca.
Similar cases by region and price band: Cases with a comparable region and price band — for context, not a promise of the same outcome.
Anonymised individual case, not a binding statement for other projects · Brokerage under the §34i GewO licence held by Olga Nikushkina (D-W-132-ZUCB-95); Siegfried Perini registered as directly involved person (§11a GewO) · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank
Family house in Alcúdia — case report: Anonymised case from Mallorca: family house in Alcúdia. Mortgage financing for non-residents.
Frequently asked questions
Can pension income be the basis for a mortgage for a house abroad?
Yes, in this case the pension income was the basis. The couple's secure income from pensions and private provision lay significantly above the later financing instalment. The regular pension income had to be documented traceably and partly evidenced from abroad. Conditions depend on creditworthiness, loan-to-value and bank.
Why are the additional costs usually paid from own funds?
This reduces the financing risk and keeps the financing more stable overall.
Did the couple have to liquidate their securities portfolio to buy the penthouse in Palma?
No. The couple were able to acquire the penthouse in Palma as planned without having to liquidate existing assets entirely. The securities portfolio stayed largely intact and able to remain invested over the long term.
A similar situation in Spain? Let's talk.
Every financing in Spain is an individual case. In a free initial consultation we will tell you honestly what is feasible and which bank fits.
Related pages
Mallorca mortgage for non-residents
Market analysis, loan-to-value and conditions for the region.
Tavira: Financing a townhouse with a courtyard for a permanent centre of life
Historic townhouses often have a special charm but require careful planning of the renovation.
Faro: Financing an apartment in the city centre for a permanent centre of life
Anyone who wants to live permanently in Portugal does not necessarily have to buy a property right on the beach.
Portimão: apartment on the Arade waterfront, permanent home
Portimão offers far more than a well-known seaside resort.
Apartment in Cala Ratjada — case report
Anonymised case from Mallorca: apartment in Cala Ratjada. Mortgage financing for non-residents.
Charming finca near Santanyí — case report
Anonymised case from Mallorca: charming finca near Santanyí. Mortgage financing for non-residents.
Apartment in Porto Cristo — case report
Anonymised case from Mallorca: apartment in Porto Cristo. Mortgage financing for non-residents.
Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under § 34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.