Practical case Mallorca: Penthouse with a sea view in Palma – Reaching financing safely with 30 % equity
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.
At a glance
- Purchase price: 890.000 €
- Financing required: 623.000 €
- Equity: 382.700 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
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.
Initial situation
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.
Financing overview
- 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.
The challenge
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.
Analysis
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.
Financing solution
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.
Outcome
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.
What other buyers can learn
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.
Frequently asked questions
How much equity is often needed for a property on Mallorca?
Should securities be sold entirely?
Why are the additional costs usually paid from own funds?
Conclusion
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.
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To the case report →A similar situation in Spanien? Let's talk.
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Book a free consultationAnonymised individual case, not a binding statement for other projects · Siegfried Perini, BAFA-notified for the cross-border activity of the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank