Unencumbered — or the balance is redeemed
The 50 per cent is calculated on the unencumbered property. A small residual balance is not an obstacle: it is redeemed as part of the new financing — it only reduces the capital released.
Existing property · releasing capital · Spain
Your paid-off property in Spain is idle. It does not have to be.
Selling in order to buy costs tax, commission and the growth you would still have captured. There is a way that leaves the property where it is.
Can I borrow against a Spanish property I already own outright?
Yes, provided it is free of encumbrances — a charge can then be registered for up to 50 per cent of the tasación, releasing capital for the next purchase. It is worth the effort because the alternative is expensive: selling in order to buy costs tax, commission and the future growth you would have kept. Two limits matter. First, the funds must demonstrably go into the next property in Spain; this is not a general-purpose loan. Second, supply is thin — Spanish banks currently offer almost no refinancing to non-residents, and many lenders withdrew from this business after 2007. What the branch tends to offer instead is a consumer loan on entirely different terms, which is worth identifying before you sign anything. It is also worth checking early whether your property is registered free of charges in practice as well as on paper, since old entries surface late.
Equity release Spain — why the branch says no
The Spanish mortgage market is built around acquisition. The standard hipoteca funds a transaction: contract, price, valuation, payment to the seller. It is standardised, and lending decisions are largely automated.
Releasing capital on a property you already own does not fit that grid. Somebody would have to assess it by hand — and the branch has no mandate to. For residents it is already the exception; for non-residents, some lenders refuse outright because enforcement abroad would be difficult.
How narrow the market is, competitors say themselves. Spanish broker IMS Mortgages states publicly that remortgaging in Spain is offered by exactly one lender, that banks are not currently providing refinancing for non-residents, that raising finance on a property you already own requires it to be free of liens, and that the funds may not leave Spain because the banks control their use (IMS Mortgages, retrieved 14 July 2026). Since 2007 many lenders have withdrawn from refinancing altogether.
The "no" you get is usually a statement about the institution, not about your case.
What your property has to bring
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A lender that might have to enforce wants buyers. Liquid, internationally sought-after markets carry this; thin markets are where it fails.
Documented use of funds
The capital goes into the next property in Spain, evidenced. Free use is not part of this structure — anyone promising that means something else.
Two loans, not one
You end up servicing two facilities. Affordability has to hold for both — including a year in which one property sits empty.
Third-party property, minimum size, age rule
A third party's property can also be used — the practical case being parents helping out with their paid-off finca. The loan then goes to the owner: they are on the title and their property secures their share. In practice this usually means several separate loans rather than one large one, and anyone named as a borrower must hold at least 10 per cent of the title to the property concerned.
The release loan should be at least around €150,000, and processing takes anywhere from a few days to several weeks. The age rule applies here as with any Spanish mortgage: repaid by 75 — with two borrowers, the younger borrower's age counts.
What else you will be offered — and what it is
Search this topic and you will quickly meet providers promising money against your property within 72 hours. That is capital privado — private capital. It is fast, it is available, and it costs a multiple. For a short bridge that can be right.
What is described here is different: a bank, at bank pricing, with bank scrutiny and the pace that comes with it. The difference does not show on drawdown day. It shows over the term.
- Concentration risk. Two properties in the same market, both charged.
- The property is no longer free. You give up the debt-free backbone deliberately. That is a decision, not a formality.
- It is not a commitment. All figures are orientation from our brokerage practice — not a commitment and not a guaranteed condition. Whether a case works depends on the property, the valuation and your standing: subject to credit assessment, case by case, no legal entitlement.
Worked example · Mallorca
Buying a new-build villa in Son Gual without touching liquid assets
Financed across two Spanish properties — the existing villa stays in the family
A Bavarian business family owns an unencumbered villa in Santa Ponsa and wants a new-build villa in Son Gual as their future home. The securities portfolio and company holdings are to remain untouched.
| Item | Amount | Note |
|---|---|---|
| Existing villa Santa Ponsa · tasación | €5,000,000 | free of charges |
| New-build villa Son Gual · purchase price | €4,200,000 | |
| Purchase costs (approx. 12 %) | €504,000 | |
| Total investment | €4,704,000 | |
| New-build mortgage (70 % of the price) | €2,940,000 | secured on the new villa |
| Remaining requirement (equity share + costs) | €1,764,000 | |
| Charge on the existing villa | €1,764,000 | = 35.3 % of the tasación |
50 % would have been possible — €2,500,000. Only what the purchase needs is drawn. The headroom stays.
And the other side of it: Total debt €4,704,000, secured on both properties. The villa that was free of charges is now collateral — that is the price of not selling it.
Note: This worked example is based on typical financing constellations from our practice. All amounts, persons and property data are anonymised or illustrative. It is not a customer testimonial. Every financing is assessed individually against personal standing, the property valuation (tasación) and the lender's own criteria.
Region: Property finance in Mallorca
Free guide
Release capital from a Spanish property — and buy again — the guide as a PDF
How the structure works, what breaks it, which documents the lender wants to see and in which order to proceed. Free, by email, no upfront cost.
What is inside:
- Loan-to-value · up to 50 % of the tasación
- Requirement · the existing property is free of charges
- Use of funds · documented, into the next property in Spain
- Lenders writing this · 2 of 15–20 approached (Perini Market Check 07/2026)
Open the PDF directly — no form · Release capital from a Spanish property — and buy again (PDF)
All figures are orientation from our brokerage practice — not a commitment and not a guaranteed condition. Whether a case works depends on the property, the valuation and your standing: subject to credit assessment, case by case, no legal entitlement.
Frequently asked questions
Can a non-resident raise capital against a paid-off Spanish property?
Most Spanish banks decline. The market is built around purchases: contract, price, valuation, payment to the seller. Releasing capital without a purchase does not fit that grid, and for non-residents it is largely closed. It is possible where the property is free of charges, up to around 50 per cent of the tasación.
Why 50 per cent and not 70 as on a purchase?
On a purchase a price confirms the value — somebody is paying it right now. On an existing property there is only a valuation. The safety margin is correspondingly larger.
Must the property be free of charges?
Not necessarily. Either it is paid off, or a small residual balance is redeemed as part of the new financing. The 50 per cent is then calculated on the unencumbered property.
Can my parents' property be used as security instead?
Yes. A third party's property can secure the loan. The owner then takes out the loan themselves — they're the one on the title and liable with their property for their share. In practice this usually results in several separate loans, and anyone named as borrower needs to hold at least 10 per cent of the title on the relevant property.
Is there a minimum amount — and how long does it take?
The capital-release loan should be at least around €150,000. Processing takes anywhere from a few days to several weeks depending on the case. The usual age rule applies too: repaid by age 75 — with two borrowers, the younger one's age counts.
Do I have to sell my existing property?
That's exactly the point: no. The usual route — sell to be able to buy — costs tax, commission and the future appreciation you'd otherwise have kept. Releasing capital against it leaves the existing property exactly where it is.
Two lenders say yes here. The others do not.
Send us the key facts of the existing property and the planned purchase. We will tell you whether the chain holds — before you file an application anywhere.
Discuss your caseRelated: Financing stage payments · all three structures