The Costa del Sol is one of Europe's leading second-home destinations, and every year thousands of Spanish and international buyers consider financing their holiday house or winter retreat here. The good news is that interest rates have eased; the small print is that a second home is not financed like a primary one. Here we explain the current terms and how to get ready.
How much the bank will lend
For a primary residence banks typically reach 80% of the appraised or purchase value. For a second home the bar drops: 70% is the usual ceiling, and some lenders stop at 60%. In practice you should plan for 30%-40% of the price in savings, plus purchase costs (taxes, notary, land registry and conveyancing) that in Andalusia add roughly another 10%-12% on top of the price.
Terms and monthly payment
The maximum term is shorter too: against the 30 years available for a primary home, a second residence is usually financed over a maximum of 25 years. As a prudent rule, the monthly payment should not exceed 30%-35% of your net income once all your debts are included. A shorter term raises the instalment, so it is worth running the numbers before falling for a property.
Interest rates: fixed, mixed or variable
Under current conditions, and with the discounts for direct-debiting your salary and taking out insurance, fixed-rate mortgages sit roughly between 2.75% and 3.40%. Mixed loans (an initial fixed tranche, then variable) start lower, around 1.80%-2.90% for the fixed stretch, while variable mortgages track the Euribor plus a margin starting around 0.49%. For a second home, where you are after peace of mind and predictability, a fixed rate is usually the wiser choice: it removes the risk of future hikes.
Personal use or investment: the bank cares
Lenders do not view a home for personal enjoyment the same way as one meant for rental. If you plan to let it, especially as a short-term holiday rental, many banks tighten their terms or decline the application outright, because they regard rental income as less reliable. If that is your case, it pays to present the operation clearly from the outset and, where needed, consider long-term seasonal letting, which banks look on more favourably.
What if you are a foreign buyer?
A large share of Costa del Sol buyers are non-residents. In that case financing usually ranges between 60% and 70% of the value, with extra paperwork (proof of income in your home country and, at times, sworn translations). It is not a barrier: it is routine, and local banks are used to working with international clients. The key is to prepare your documents well in advance.
Conclusion
Buying a second home on the Costa del Sol is perfectly achievable with good planning: budget for more upfront savings than for a primary residence, set the term to a comfortable payment, and consider a fixed rate for peace of mind. At EVS we guide you through the whole journey, from choosing the right property to advising on financing and paperwork. Tell us what you are looking for and we will help you make it happen.
