3.000.000 € purchase price
- Purchase loan (70 %)2.100.000 € · 2,10 %
- Equity release on the existing property900.000 € · 2,45 %
- ITP Balearen (11,33 % effective)340.000 €
- Own funds needed (costs only)343.200 €
- Combined monthly payment15.471 €
Model calculations · Spain and Portugal
What an equity release supports — ten calculations to check
If you already own a paid-off property, the next purchase needs no equity towards the price — only towards the costs. These calculations show how much existing property is enough.
How much equity do I need if I release capital on a paid-off property?
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.
Information
The structure in one sentence
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.
Spain
Mallorca · model calculation
Ibiza · model calculation
Menorca · model calculation
Marbella · model calculation
Madrid · model calculation
Barcelona · model calculation
Costa de Valencia · model calculation
Costa Blanca · model calculation
Eight model calculations for Spanish regions
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.
2.500.000 € purchase price
- Purchase loan (70 %)1.750.000 € · 2,15 %
- Equity release on the existing property750.000 € · 2,50 %
- ITP Balearen (11,00 % effective)275.000 €
- Own funds needed (costs only)278.200 €
- Combined monthly payment12.952 €
2.000.000 € purchase price
- Purchase loan (70 %)1.400.000 € · 2,25 %
- Equity release on the existing property600.000 € · 2,60 %
- ITP Balearen (10,50 % effective)210.000 €
- Own funds needed (costs only)213.200 €
- Combined monthly payment10.458 €
2.200.000 € purchase price
- Purchase loan (70 %)1.540.000 € · 2,20 %
- Equity release on the existing property660.000 € · 2,55 %
- ITP Andalusien (7,00 % effective)154.000 €
- Own funds needed (costs only)157.200 €
- Combined monthly payment11.451 €
1.800.000 € purchase price
- Purchase loan (70 %)1.260.000 € · 2,30 %
- Equity release on the existing property540.000 € · 2,60 %
- ITP Madrid (6,00 % effective)108.000 €
- Own funds needed (costs only)111.200 €
- Combined monthly payment9.443 €
1.600.000 € purchase price
- Purchase loan (70 %)1.120.000 € · 2,35 %
- Equity release on the existing property480.000 € · 2,65 %
- ITP Katalonien (11,12 % effective)178.000 €
- Own funds needed (costs only)181.200 €
- Combined monthly payment8.432 €
700.000 € purchase price
- Purchase loan (70 %)490.000 € · 2,45 %
- Equity release on the existing property210.000 € · 2,65 %
- ITP Valencia (9,00 % effective)63.000 €
- Own funds needed (costs only)65.500 €
- Combined monthly payment3.713 €
500.000 € purchase price
- Purchase loan (70 %)350.000 € · 2,55 %
- Equity release on the existing property150.000 € · 2,70 %
- ITP Valencia (9,00 % effective)45.000 €
- Own funds needed (costs only)47.500 €
- Combined monthly payment2.673 €
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Portugal
Algarve · model calculation
Algarve · model calculation
Two model calculations for Portugal
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.
2.000.000 € purchase price
- Purchase loan (80 %)1.600.000 € · 2,35 %
- Equity release on the existing property400.000 € · 2,60 %
- IMT (7,50 % effective)150.000 €
- Stamp duty on the loan (0,6 %)9.600 €
- Own funds needed (costs only)176.800 €
- Combined monthly payment10.501 €
750.000 € purchase price
- Purchase loan (80 %)600.000 € · 2,50 %
- Equity release on the existing property150.000 € · 2,70 %
- IMT (7,50 % effective)56.250 €
- Stamp duty on the loan (0,6 %)3.600 €
- Own funds needed (costs only)67.050 €
- Combined monthly payment3.989 €
Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.
Where the lower limit sits
Because an equity-release loan is only workable from around €150,000 and covers 30 % of the price in Spain, the structure makes sense from roughly €500,000. In Portugal the release covers only 20 %, which puts the threshold at about €750,000. 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.
FAQ
Common questions
Do I really need no equity towards the purchase price?
If an unencumbered property of sufficient size exists: yes. The purchase loan and the equity release together cover up to 100 % of the price. The acquisition costs remain your own funds in every case — they are not financed.
Can I release capital in Spain and buy in Portugal?
No. The released capital is tied to the country where the mortgaged property sits, and the bank monitors how it is used. Within that country the region is free — a release in Mallorca can fund a purchase in Madrid.
What if I am too old for the term?
A younger co-borrower can carry the term, usually the child. Co-signing is enough; no income of their own needs to be recognised.
Do both loans sit with the same bank?
As a rule no. The release on the existing property and the loan on the new one are two separate transactions at two institutions. If one person owns both properties, the payments count together in the affordability calculation.
Read on
Related pages
Special financing
Release capital from a Spanish property
Which lenders do it at all, what they ask for, and where it usually fails.
Learn more → Special financingAge limits and co-borrowers
How the term is carried by the next generation.
Learn more → Case reportsCompleted financings
Documented cases from our practice — as distinct from the model calculations on this page.
To the reports →