Amortization, refers to the gradual repayment of a home loan over time through a series of regular payments, typically monthly. These payments consist of both principal (the original loan amount) and interest (the cost of borrowing). As each payment is made, a portion goes towards reducing the loan balance (principal), while the remainder covers the interest charges. Over the loan term, the proportion of payment allocated to principal gradually increases, leading to the eventual full repayment of the mortgage. Amortization schedules are designed to ensure borrowers systematically pay off their loans and build home equity, while lenders receive their expected interest earnings.

Comparing mortgages involves evaluating different loan options offered by various lenders. This process helps you identify the most favorable terms, interest rates, and features that align with your financial situation and goals. By comparing mortgages, you can potentially save money through lower interest rates, choose a loan that suits your needs, and make an informed decision that enhances your financial well-being over the long term.

Comparing mortgages can be a time-consuming task as it involves researching and analyzing various lenders and their offerings. At Habeno we can give you access to comprehensive information and personalized guidance. We simplify the complexities of mortgage comparison, saving you valuable time and ensuring you can make an informed decision with confidence. Start by applying for a free pre-approval.

A co-applicant for a mortgage is a secondary individual who applies for the home loan alongside the main borrower. Both parties are jointly responsible for repaying the mortgage. Co-applicants are often used to meet eligibility criteria, such as income or credit requirements, and can enhance the chances of loan approval.

A down payment for a mortgage is an initial payment made by the homebuyer when purchasing a property. It's a percentage of the home's price paid upfront in cash. This payment lowers the amount needed from a mortgage loan and demonstrates the buyer's commitment, potentially leading to better loan terms.

DTI, or Debt-to-Income ratio, is a financial metric used to assess an individual's or a borrower's financial health. It measures the percentage of a person's monthly income that goes towards paying debts, including loans, credit card payments, and other financial obligations. A lower DTI ratio indicates a healthier financial position, as it suggests that a smaller portion of one's income is allocated to debt payments. Lenders often use DTI as a factor in loan approval decisions, as it helps them gauge a borrower's ability to manage additional debt responsibly.

Equity release is a financial arrangement primarily designed for older homeowners to access the value of their property without selling it. It allows them to unlock a portion of the equity built up in their home, typically in the form of a lump sum or regular payments. This can provide additional funds for retirement or other expenses. The loan, plus interest, is repaid when the property is eventually sold, often when the homeowner passes away or moves into long-term care. Equity release can offer financial flexibility but requires careful consideration due to potential impact on inheritance and overall financial well-being.

Euribor is the benchmark rate European banks use when lending to one another in euros.

The Euribor rates are considered to be the most important reference rate in the European money market. It is used as a reference for banks within Europe when they set their interest rates to their customers.

As a consumer it might be a good idea to compare the interest rates you receive from your bank with the Euribor to know how much mark-up your bank is adding and if there is room for more negotiation.

A fixed interest rate is a set percentage that remains constant throughout the duration of a loan or credit arrangement. It doesn't change with fluctuations in the broader financial market or economic conditions. Borrowers who opt for a fixed interest rate know exactly how much interest they will pay over the life of the loan, providing stability and predictability in their repayment plan. This contrasts with variable or adjustable interest rates, which can change periodically based on market shifts, potentially impacting the total interest cost for borrowers.

Interest is the additional amount of money that a borrower pays to a lender as compensation for using their funds. It is a cost associated with borrowing money or delaying repayment. Interest can be seen as the 'fee' paid for the privilege of using someone else's money. In the context of loans, it's the extra money that the borrower repays in addition to the original borrowed amount.

Interest-only mortgages in Spain are a type of home loan where borrowers are initially required to make payments solely on the interest portion of the loan, rather than paying down the principal amount. These mortgages are particularly attractive to investors and those seeking short-term financing as they offer lower monthly payments during the interest-only period. However, it's essential to understand that interest-only mortgages in Spain often have a limited duration, after which borrowers must begin repaying both the principal and interest, which can result in higher monthly payments. Potential borrowers should carefully assess their financial situation and long-term repayment strategy before opting for this type of mortgage.
If you want to know more, you can read our guide about interest-only mortgages

An interest rate is the percentage charged by a lender to a borrower for the use of borrowed money, typically expressed as an annual rate. It's a crucial factor in loans and credit arrangements. The interest rate reflects the cost of borrowing and is determined by factors like the borrower's creditworthiness, prevailing market conditions, and the type of loan. It directly influences the overall amount a borrower will repay on top of the original borrowed sum, shaping the financial dynamics of loans and investments.
If you're interested you can read more in our guide to Spanish interest rates

A mortgage lender is an institution or individual that offers financial assistance to individuals or businesses looking to purchase a real estate. They provide loans, known as mortgages, to help borrowers buy homes or properties. The lender evaluates the borrower's creditworthiness, sets interest rates and repayment terms, and usually require the property to serve as collateral.

A local mortgage, a loan obtained from a lender within the same geographical area as the property, offers several advantages. Additionally, having the mortgage in the same currency as the property purchase can provide further benefits. This approach minimizes the risk of currency fluctuations, as the loan and property value remain aligned in the same currency. It helps borrowers avoid potential exchange rate risks that could lead to higher repayment amounts in their home currency. This currency alignment can offer greater financial predictability and stability throughout the mortgage term, making budgeting and repayment planning more manageable for homeowners.

Loan-to-value (LTV) is an often-used ratio in mortgage lending to determine the mortgage amount and how much the lender need to have in cash deposit.

As a foreigner in Spain you can usually lend up to 70 percent of the value of the property, while local residents can usually lend up to 80 percent. The remaining percentage you need to have in cash deposit.

A mortgage is a financial arrangement where a borrower obtains a loan from a lender, typically a bank or a financial institution, to purchase real estate, such as a home. The property being purchased serves as collateral for the loan. The borrower agrees to repay the loan over a specified period, making regular payments that include both the principal (the original loan amount) and interest (the cost of borrowing).

If you want to know more information about international mortgages, then you can read one of our guides below:

Spanish mortgages
Portuguese mortgages

A mortgage advisor is a professional who provides expert guidance and assistance to individuals seeking a mortgage loan for purchasing real estate. Their role involves evaluating a borrower's financial situation, helping them understand various mortgage options, and recommending suitable lenders and loan terms based on the borrower's needs and circumstances. Mortgage advisors navigate the complexities of the mortgage market, ensuring borrowers make informed decisions, secure competitive interest rates, and successfully complete the loan application process.

Below you will find links to where you can read more about the Mortgage Advisors at Habeno:

Meet Pierluigi, one of the mortgage advisors at Habeno

The mortgage amount refers to the total sum of money that a borrower is seeking to borrow from a lender to finance the purchase of a property, typically real estate. It represents the initial loan balance before any interest or fees are added. The mortgage amount is a crucial factor in determining the overall cost of the loan and the monthly payments the borrower will be required to make over the course of the loan's term. It is often influenced by the property's purchase price, the borrower's down payment, and any additional costs or fees associated with the mortgage transaction.

A mortgage application is a formal request submitted by a borrower to a lender to obtain a mortgage loan for purchasing real estate. It includes detailed information about the borrower's financial situation, employment history, credit history, and the property being considered for purchase. The application serves as the basis for the lender's evaluation of the borrower's eligibility and creditworthiness. Upon approval, the mortgage application leads to the establishment of the loan terms, interest rate, and repayment schedule, facilitating the process of acquiring the desired property.

A mortgage calculation refers to the process of using mathematical formulas to determine various aspects of a mortgage loan, such as monthly payments, interest costs, loan term, and total repayment amount. It involves considering factors like the principal amount (loan balance), interest rate, loan term, and any additional costs or fees. Mortgage calculations help borrowers and lenders understand the financial implications of a mortgage, enabling borrowers to budget effectively and lenders to assess the feasibility of the loan. These calculations are essential tools for comparing different mortgage options and making informed decisions.

A mortgage pre-approval is a preliminary evaluation of a potential borrower by a lender to determine what kind of loans a borrower could be approved for and what amount that can be borrowed.

If you are interested to know how much you can borrow, then you can apply for a free pre-approval.

Please note. A pre-approval is often different from a final mortgage offer and a pre-approval does not guarantee a specific interest rate.

The NIE (Número de Identificación de Extranjero) is the ID number for all foreign residents and non-residents living or conducting tax-related business in Spain, for example buying a property.

If you are planning on buying a property in Spain, you will need a NIE-number. If you are buying a property together with someone and it will be registered on both of you, then both of you are required a NIE-number.

Please reach out to us if you have more questions regarding a NIE-number or if you need help register for one.
Or if you like to do it yourself, you can ready our guide about how to get a Spanish NIE number.

A non-resident refer to someone who owns property in a country where they are not considered a permanent resident or citizen. Here you can read more if you are looking for a mortgage in Spain as a non-resident.

A notary is a publicly commissioned official who witnesses the signing or authentication of a legal document.

Please contact us if you need help finding a notary for your property purchase.

The purchase price refers to the agreed-upon amount that a buyer is paying to acquire a real estate property. It represents the value of the property being purchased and is a crucial factor in determining the mortgage amount—the initial loan balance that the buyer seeks from a lender.

Property tax, refers to a local tax imposed on real estate ownership. It is typically levied by the respective municipality or local government where the property is located. Property tax, often known as 'Impuesto sobre Bienes Inmuebles' (IBI) in Spain and 'Imposto Municipal sobre Imóveis' (IMI) in Portugal, is based on the assessed value of the property and helps fund local public services and infrastructure. It is an ongoing financial obligation for property owners, and the amount varies depending on factors like property type, location, and value. Staying informed about property tax rates and payment schedules is essential for buyers to effectively manage their homeownership costs.

Real estate refers to the physical property being purchased, including the land and any structures on it, such as the house itself. It encompasses the tangible aspects of the property, its location, size, design, and condition. Examples of real estate include single-family houses, holiday homes, villas, and apartments.

If you are interested in buying a real estate you can read more about buying a house in Spain.

A real estate agent is someone who facilitates property transactions between buyers and sellers. These agents possess in-depth knowledge of local real estate trends, property values, and legal regulations. They assist clients in finding suitable properties, arranging viewings, negotiating terms, and guiding them through the intricate process of buying or selling a property in Spain. Real estate agents play a crucial role in helping individuals navigate the complexities of the property market while ensuring a smooth and informed transaction experience.

At Habeno we work closely with more than 700 Spanish and Portuguese real estate agents. If you need help finding a property you can just let us know which areas you are interested in and we'll help you find a real estate agent.

Refinancing refers to the act of replacing an existing home loan with a new one, usually to secure more favorable terms. This can include obtaining a lower interest rate, adjusting the loan term, or changing from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage (or vice versa). Refinancing can help homeowners reduce monthly payments, save on interest costs over time, or access home equity for other financial needs.

A second mortgage refers to a secondary loan that is taken out against a property that already has an existing mortgage. It is a separate borrowing arrangement that allows homeowners to access the equity they've built in their property. Second mortgages are subordinate to the first mortgage, meaning that in case of foreclosure, the first mortgage lender would have priority in recovering their funds. Second mortgages are commonly used for various purposes, such as home improvements, debt consolidation, or funding major expenses. The interest rates on second mortgages may be different from those on the first mortgage and can be either fixed or variable.

The Golden Visa is a residency program offered by Spain and several other countries that allows non-EU citizens to obtain a residence permit by making a qualifying investment, often in real estate. In Spain, the Golden Visa program requires a minimum property investment of €500,000.
Here you can read more about the Spanish Golden Visa