Financing the instalments to the developer
No Spanish bank finances the instalments during construction. Anyone who owns largely unencumbered property in Germany still has a route — it simply runs through a different legal system.
Legal notice
Author & regulatory separation. Content author: Siegfried Perini. Mortgage brokerage in Spain and Portugal is carried out under the §34i GewO licence held by Olga Nikushkina (BAFA-notified). This information does not replace legal or tax advice.
The capital exists — it is just not liquid
The typical case: a couple in their mid-fifties, the German home paid off or nearly so, a new-build on the Costa Blanca reserved, and a payment plan demanding six-figure instalments over the next 24 months. The wealth is there — it is in bricks, not in the account.
A Spanish bank cannot help here: it lends against the Spanish property, and that does not yet exist. A German bank will not finance the Spanish holiday property directly either — it neither can nor wants to hold a charge in a foreign land register.
German security, unrestricted use of funds
What a German bank can do: a mortgage-secured loan against the German property. The security sits in Germany, the law is German law, the land register is the familiar one. What the borrower does with the money is their own affair.
That makes the Spanish developer instalments payable — not as "Spanish financing" but as raising capital against German assets. The distinction is not cosmetic: it decides whether a bank takes the case at all.
At completion, two paths remain open: the balance is covered by a Spanish mortgage while the German facility continues alongside — or, where the valuation supports it, the whole purchase is carried by the German security. Which is sensible depends on loan-to-value, the term you want and your income.
When this route holds
- German property with sufficient free lending headroom — not necessarily unencumbered, but not fully drawn either.
- Income that carries both: the German facility during the build and the Spanish instalment later.
- A realistic timeline. Construction takes 18 to 36 months. The fixed-rate period should match — not fall short of it.
- A sound developer contract with secured instalments. Money paid into an unsecured project turns the German facility into risk without cover. See aval bancario & seguro de caución.
Where this does not work
Without property in Germany, this bridge does not exist. What remains is own funds, a later entry (buying a completed new-build unit) or doing without off-plan. That is unwelcome, but more honest than a financing promise nobody can keep.
Equally: two parallel loans mean two instalments. The burden during the construction phase must be bearable — including if completion slips by six or twelve months. Delays in Spain are not the exception.
Frequently asked questions
Is the Spanish property charged in the process?
Does the German property have to be unencumbered?
Is this foreign-property financing?
Who handles a case like this?
More on the construction phase
Subrogación: take over the developer's mortgage, or redeem it?
Go to page.
Zur Seite → New-buildHipoteca de autopromotor: self-building in Spain
Go to page.
Zur Seite → New-buildTiming: mortgage approval after 24 months of construction
Go to page.
Zur Seite → New-buildNew-build or resale? What actually differs
Go to page.
Zur Seite → New-buildNew-build on income outside the euro
Go to page.
Zur Seite → New-buildChecklist: what must be checked before the first instalment
Go to page.
Zur Seite →New-build in Spain — let us work through the construction phase together
I check which part of the price has to come from your own funds, what a German bank can raise against existing property, and what the Spanish bank takes on at completion — free of charge, no upfront cost.