Remortgage Spanish property on the Balearics: can non-residents do it?
Most banks in Spain only finance a purchase. Anyone who wants to mortgage an already-paid property to acquire the next one hears almost everywhere, as a non-resident: can't be done. Almost everywhere.
Can non-residents on the Balearics raise capital against their existing property to buy the next one?
Yes, as a non-resident you can mortgage an existing, paid-off property on the Balearics, but only with the few banks that underwrite it. Most Spanish banks finance purchases only. Where it works, the loan-to-value is around 50 % of the tasación, the existing property must be unencumbered, and the released capital must flow into the next property in Spain.
Equity release: the chain
A mortgage of up to about 50% of the market value is registered against the existing property, the released capital becomes the equity for the next purchase, and that purchase is financed up to 70%.
- My Spanish bank says this can't be done — is that true? Probably true for that bank: most finance only purchases and decline capital release for non-residents. That's a statement about the institution, not the market. The Spanish banks.
- Why only 50% and not 70%? The risk profile differs: a purchase has a price confirming the value, an existing-property mortgage only a valuation — so the safety margin is larger.
- Do I have to sell my existing property first? No. Selling to buy costs transfer tax, agent commission and lost appreciation; mortgaging leaves it where it is. With two borrowers the younger one's age sets the term. What we charge.
Can I, as a non-resident, remortgage my paid-off Spanish property on the Balearics to buy the next one? Yes — you can remortgage Spanish property on the Balearics as a non-resident, but only with the few banks that underwrite this at all.
Most Spanish banks finance purchases exclusively; anyone who wants to mortgage an already paid-off, unencumbered property to raise capital for the next one hears "can't be done" almost everywhere. Almost everywhere.
Where it works: the loan-to-value sits around 50% of the tasación, and the existing property must be unencumbered — that's the entry requirement, not a rate to negotiate.
The released capital must demonstrably flow into the next property in Spain; the funds may not leave the country. Your existing asset becomes equity without you having to sell it.
Important and honest: this is a niche product with narrow conditions, not a standard offering — and that's exactly why bank selection is what decides the outcome. We check per case which lender underwrites this kind of mortgage against existing Balearic property.
The idea is simple; the execution isn't. You own a property on Mallorca, Ibiza or Menorca — paid off, or largely free of debt. That property isn't dead capital. It's security.
1. Mortgage the existing property. A mortgage is registered against the existing property — in the order of up to about 50% of the market value. 2. The proceeds become equity. The released capital serves as the equity contribution for the next purchase. 3. Finance the next property. The follow-on purchase is financed like any purchase — up to 70% of the lower of purchase price and tasación.
The result: the portfolio grows without fresh capital having to flow in from outside. No sale, no liquidating investments, no capital transfer from Germany.
This typically becomes relevant from a financing volume of around half a million euros — below that, the effort rarely pays off for anyone involved.
Representative example: Advertising a rate obliges us to show what it means in figures. Here it is — calculated with the bonificación, the rate most deals actually close at.
What the discount requires, what it is worth and what applies without it is set out below. Loan amount: €200,000. Loan-to-value: 70 %. Term: 20 years, fully amortising loan. Fixed borrowing rate: 3.30 % (with bonificación). Monthly payment: €1,139.47.
APR (TAE): 3.37 % — excluding the running costs of the bundled products (bank-dependent). Total amount payable: €273,472. Assumptions: Valuation (tasación) €400, no arrangement fee (comisión de apertura 0 %).
The borrowing rate shown applies with the bonificación; it requires two to four bundled products, depending on the bank, whose running costs are not included in the APR. Without the bonificación the rate is 4.30 % → payment €1,243.81, APR 4.41 %.
The discount is therefore worth about €1,252 a year. It requires two to four, depending on the bank, bundled products (typically: bank account, term life cover, buildings insurance, alarm system). The bundled products carry running costs that can partly or fully offset the rate discount.
Whether the bonificación pays off depends on what those products cost in your case — we calculate that against the discount before you sign.
Rates as at 21 September 2026. Source: Perini’s own bank survey (as at September 2026); 12-month Euríbor: Banco de España / EMMI.
Not an offer and not a financing commitment — the rate you are actually granted depends on the bank, the property and your file.
Why only a few banks write it
The Spanish mortgage market is built around acquisition. The classic hipoteca finances a purchase transaction: there's a purchase contract, a purchase price, a valuation, a payout to the seller. Everything is tailored to that one sequence.
A mortgage without a purchase transaction — releasing capital against a property you already own — doesn't fit that mould. For residents, it's already the exception. For non-residents, most institutions decline it outright: the use of funds is harder to trace, the anti-money-laundering checks are more involved, and it simply isn't the branch's business model anyway.
That's why you'll usually get a no on this question — not because it's impossible, but because the counter you happen to be standing at doesn't do it.
There are lenders that do it. Few. Which ones, what valuation standards they apply, and how an application needs to be structured so it doesn't fail in the first round — that's our work, and that's why it isn't listed on this page. It comes at the end of a conversation.
What your existing property needs to bring
Your existing property needs to be unencumbered or nearly so and in a marketable location. The affordability calculation has to hold up for two loans, and the use of funds in Spain must be cleanly documented.
- Unencumbered, or nearly so (Property): The lower the existing charge, the greater the room. A property with a high remaining balance can't carry the chain — the 50% refers to market value, not to what's still unencumbered.
- Marketability (Location): The Balearics have the advantage here: a liquid market, solid comparables, international demand. A bank that would have to sell the security in a default scenario finds buyers here. In thinner markets, that's exactly where it falls apart.
- Two loans, not one (Creditworthiness): At the end of the chain you're servicing two financings. The affordability calculation has to hold up for both — including for a period when one of the properties isn't rented out.
- Source and use of funds (Evidence): With capital release, the bank looks more closely than with an ordinary purchase. What the money is used for must be cleanly documented — a planned second purchase is a good, traceable one — but what matters is that the use takes place in Spain.
What we won't hide from you
This structure is leverage. Leverage works in both directions, and anyone who doesn't tell you that is selling you something.
- Concentration risk. In the end, two properties sit in the same market — and both are encumbered. If price levels fall on the Balearics, they fall under both at once.
- Both properties are security. After the mortgage, the existing property is no longer the debt-free backbone it was before. You're deliberately giving up that security. Interest-rate risk. With a variable rate, a Euríbor move affects both loans simultaneously.
- It isn't a commitment. Whether your case is workable is decided by the property, the valuation and your creditworthiness — not by a website. The figures given here are orientation, not a guaranteed condition.
If these points don't put you off but raise questions instead: that's exactly what we should talk about.
When the wealth sits in the house and the next generation needs it
The typical Mallorca constellation looks like this: the villa has been paid off for years, the owner is over seventy, and the child is facing a plan of their own. Nobody wants to sell. Two things still make the case workable.
First, the term. The loan normally has to be repaid by the borrower's 75th birthday — but where there are two borrowers, the age of the younger one counts. If the child joins as a second borrower, the term follows their age; they must be entered in the land register with an ownership share of at least 10%, but their own qualifying income is not required. An arithmetically impossible instalment becomes a workable one.
Second, the use of funds. It is tied to a property in Spain. The capital goes into a purchase, a renovation or a new build in Spain and is evidenced to the bank — the funds may not leave the country. That can also be the child's purchase. Anyone wanting to fund a project in Germany, or a purpose without a property, falls outside the structure.
The tax side of a gift — Spanish gift tax, Balearic allowances, valuation — belongs with your tax adviser. We tell you whether the financing works and what the bank measures it against. In full, with the German side and other regions: Inheritance and Gift Tax on the Spain Property.
Passing a share to your child: why a gift in Mallorca costs less than most people assume: The Balearic Islands have effectively abolished inheritance and gift tax for direct family in two steps — and the second step is recent. Older sources therefore still quote figures that no longer apply.
Impuesto sobre Sucesiones y Donaciones in the Balearics — as at July 2026: Inheritance — Groups I and II: 100 % relief on the tax due, no upper limit; Since: 18 July 2023, Decreto Ley 4/2023, confirmed by Ley 11/2023.
Lifetime gift — Groups I and II: 100 % deduction — previously around 7 % in effect; Since: 25 July 2025, Ley 6/2025 of 23 July 2025. Group III (siblings, nephews) — Groups I and II: 60 % or 35 %; Since: Ley 6/2025.
Groups I and II are descendants, spouses and ascendants — exactly the parent-and-child constellation. For inheritances the relief expressly extends to non-residents, corrected by Ley 11/2023 following a CJEU ruling. For gifts we did not find an equally explicit clarification — have your tax adviser confirm that point for your case.
What has to be in place:
The gift is executed as a notarial deed. Without an escritura pública the deduction does not apply. For real estate, the value stated in the deed may not exceed the cadastral reference value by more than 20 %. For cash gifts the deed must state the origin of the funds, and that origin must be evidenced. Modelo 651 must be filed even where the tax is zero. Failing to declare forfeits the deduction.
The third point fits this structure particularly well: "lending against our own, fully paid property" is a clean, documentable origin — land register, loan agreement, disbursement. Exactly the kind of evidence a deed can carry.
As at July 2026. Regional tax law changes; this overview is not tax advice. The calculation in your case — allowances, pre-existing wealth, valuation — belongs with your tax adviser. We tell you whether the financing works.
The structure isn't limited to the Balearics: mortgaging an existing property anywhere in Spain — including the guide to requesting it.
Frequently asked questions
My Spanish bank says this can't be done. Is that true?
Probably true for that bank. Most institutions in Spain finance purchase transactions exclusively and decline capital release for non-residents as a matter of policy. That's a statement about the institution, not about the market.
Why only 50% and not 70% like on a purchase?
Because the risk profile is different. On a purchase, there's a purchase price that confirms the value — someone is paying it right now. On mortgaging an existing property, there's only the valuation. The safety margin is correspondingly larger.
Does this also work on the Spanish mainland or in Portugal?
In principle yes, in practice noticeably less often. The Balearics have the most liquid and internationally sought-after market — and that's exactly what a bank looks at if it would have to sell the security in a default. The thinner the market, the faster the answer is no.
I am over 70. Is the term then too short?
Not necessarily. The loan normally has to be repaid by the borrower's 75th birthday — but where there are two borrowers, the age of the younger one counts. If a child joins as a second borrower, the possible term follows their age; they must be entered in the land register with an ownership share of at least 10%, but their own qualifying income is not required.
Five remaining years can become twenty-five, which turns an arithmetically impossible instalment into a workable one. On higher-value properties in Mallorca this is often the point at which a refusal turns into an approval.
Do I have to sell my existing property first?
That's exactly the point: no. The usual route — sell in order to be able to buy — costs transfer tax, agent commission and, quite possibly, the appreciation you'd otherwise have kept. Mortgaging leaves the existing property where it is.
The few banks that release capital from Balearic property
If you hold a property on the Balearics and are thinking about the next one: send us the key figures. We'll tell you whether the chain holds up in your case — before you apply anywhere.
Related pages
Mortgage calculator
Monthly payment, loan and purchase costs by region straight away; total cost and equity needed by email.
Mallorca mortgage for non-residents
Market analysis, loan-to-value and conditions for the region.
The Spanish banks
Mortgage in Spain for foreigners: 31 Spanish banks for non-residents at a glance — big banks, former cajas, direct and foreign lenders, 2026 merger status.
Non-resident mortgage on foreign income: will a Spanish bank fund a new-build?
Anyone funding those instalments from current non-euro earnings carries the currency risk during exactly the phase in which no bank is yet involved.
Costa Brava property: Dentists from Zurich, €648,000 for an apartment in Cadaqués
Anyone who wants to settle here permanently finds only a limited supply of homes. Early, realistic financing planning is correspondingly important.
Mortgage rates Portugal: what does the fixed rate cost non-residents?
The discount requires bundled products from the bank. Portuguese banks typically lend up to 80 per cent of the lower of purchase price or Avaliação.
Spanish mortgage for non-residents: what fixed rate can you expect?
This is our own bank survey as at 21.09.2026, with the 12-month Euríbor at 2.95 %. The bonificación is a discount against two to four bundled products.
Buy a house in Spain with German property as security: how much can you raise?
It simply has no interest in what becomes of it in Spain — and the Spanish side cannot see the German one. This route requires a property in Germany.
House prices in Spain: what do buyers actually pay at the notary?
The bank works from what was written into the deed. For house prices in Spain, in the first quarter of 2026 those two figures were about 29 per cent apart.
Wealth tax in Spain for non-residents: which allowances and rates apply?
Yes — as a non-resident you pay wealth tax in Spain (Impuesto sobre el Patrimonio) on your net assets there, essentially the property value less debts.
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.