Banks work on an income to debt ratio where the maximum permitted is 40% of the net income. Above this, a lender will not grant a mortgage
Having a high level of personal debt can cause a problem when it comes to being approved for a mortgage in Spain, even if you do have a very good income. This is because banks work on an income to debt ratio worked out on a monthly basis. The maximum debt ratio to income is 40% of the post-tax net income. Above this, a lender will not grant a mortgage.
If an applicant has lots of income from a buy-to-let portfolio, then it does become quite complicated. If total income figures are sufficient to absorb the applicant’s monthly debts and keep these payments and the new mortgage in Spain under 40% then the banks may consider approval.
If this applies to you, then do contact us for further advice and guidance on an application.