If you already own a paid-off property, the next purchase needs no equity towards the price — only towards the costs. That applies whether the next place is for yourself or a buy-to-let in Spain for rental income. These calculations show how much existing property is enough.
With an unencumbered property of sufficient size, yes: the purchase loan and the equity release together cover up to 100% of the price. Only the acquisition costs stay your own funds.
No — the released capital is tied to the country of the mortgaged property. Within that country the region is free.
A younger co-borrower, usually the child, can carry the term. Both borrowers go on the title, the smaller share at least 10 % — the younger one does not need qualifying income of their own.
None towards the purchase price. The new property is financed up to 70 percent in Spain and up to 80 percent in Portugal. The remainder is covered by releasing capital on the paid-off property. Against that property lenders go to 50 percent of the appraised value. You need own funds only for the acquisition costs. Those are never financed. From this follows a figure that is often missed. Only 30 percent of the price has to come from the existing property. So a paid-off property at 0.6 times the purchase price is enough, and in Portugal 0.4 times. Two conditions apply. The existing property must be unencumbered. And the released capital stays tied to the country where it was raised. Within Spain or Portugal the region is freely chosen. Across the border the structure does not work. A release in Mallorca can fund a purchase in Madrid.
The new property is financed up to 70 % in Spain and up to 80 % in Portugal. The remainder up to the full price comes from releasing capital on the paid-off property, against which lenders regularly go to 50 % of the appraised value. Together that is 100 % of the purchase price. What you bring yourself are the acquisition costs — those are never financed.
From this follows a figure almost nobody quotes: because only 30 % of the price has to come from the existing property, and that property is lent against up to half its value, a paid-off property at 0.6 times the purchase price is enough. A three-million purchase needs an existing property from 1.8 million. In Portugal, where the purchase itself is financed higher, the requirement drops to 0.4 times.
Two conditions apply: the existing property must be unencumbered, and the released capital stays tied to the country it was raised in. Within Spain or within Portugal the region is free; across the border it does not work.
Transfer tax differs sharply by region — from 6 % in Madrid to over 11 % effective in Mallorca. That is why it appears as its own line in every calculation.
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €2,100,000 · 2.5 % |
| Equity release on the existing property | €900,000 · 2.7 % |
| ITP Balearic Islands (11.33 % effective) | €340,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €343,200 |
| Combined monthly payment | €15,985 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €1,750,000 · 2.5 % |
| Equity release on the existing property | €750,000 · 2.75 % |
| ITP Balearic Islands (11.00 % effective) | €275,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €278,200 |
| Combined monthly payment | €13,340 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €1,400,000 · 2.5 % |
| Equity release on the existing property | €600,000 · 2.85 % |
| ITP Balearic Islands (10.50 % effective) | €210,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €213,200 |
| Combined monthly payment | €10,701 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €1,540,000 · 2.5 % |
| Equity release on the existing property | €660,000 · 2.8 % |
| ITP Andalusia (7.00 % effective) | €154,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €157,200 |
| Combined monthly payment | €11,755 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €1,260,000 · 2.55 % |
| Equity release on the existing property | €540,000 · 2.85 % |
| ITP Madrid (6.00 % effective) | €108,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €111,200 |
| Combined monthly payment | €9,662 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €1,120,000 · 2.6 % |
| Equity release on the existing property | €480,000 · 2.9 % |
| ITP Catalonia (11.12 % effective) | €178,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €181,200 |
| Combined monthly payment | €8,628 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €490,000 · 2.7 % |
| Equity release on the existing property | €210,000 · 2.9 % |
| ITP Valencia (9.00 % effective) | €63,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €65,500 |
| Combined monthly payment | €3,799 |
| Position | Betrag |
|---|---|
| Purchase loan (70 %) | €350,000 · 2.8 % |
| Equity release on the existing property | €150,000 · 2.95 % |
| ITP Valencia (9.00 % effective) | €45,000 |
| Stamp duty on the loan (0.6 %) | |
| Own funds needed (costs only) | €47,500 |
| Combined monthly payment | €2,734 |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Portugal finances the purchase itself higher, but charges two taxes Spain does not: stamp duty on the acquisition, and a further 0.6 % on the loan amount, borne here by the borrower.
| Position | Betrag |
|---|---|
| Purchase loan (80 %) | €1,600,000 · 3.4 % |
| Equity release on the existing property | €400,000 · 3.4 % |
| IMT (7.50 % effective) | €150,000 |
| Stamp duty on the loan (0.6 %) | €9,600 |
| Own funds needed (costs only) | €176,800 |
| Combined monthly payment | €11,497 |
| Position | Betrag |
|---|---|
| Purchase loan (80 %) | €600,000 · 3.4 % |
| Equity release on the existing property | €150,000 · 3.4 % |
| IMT (7.50 % effective) | €56,250 |
| Stamp duty on the loan (0.6 %) | €3,600 |
| Own funds needed (costs only) | €67,050 |
| Combined monthly payment | €4,311 |
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Because an equity-release loan is only workable from around €300,000 and covers 30 % of the price in Spain, the structure makes sense from roughly €1,000,000. In Portugal the release covers only 20 %, which puts the threshold at about €1,500,000. The higher lending ratio raises the entry point rather than lowering it.
Model calculation, not an offer. The interest rates come from our own lender survey and sit within the range currently achievable; they are graded per example by loan size. Tax rates are as at 31 July 2026. The taxable base is always the higher of purchase price and official reference value.
Monthly instalment, total cost and equity requirement for your exact figures.
Which lenders do it at all, what they ask for, and where it usually fails.
Documented cases from our practice — as distinct from the model calculations on this page.