Loan to Value in Spanish: How LTV Works for Spanish Mortgages

Loan to value (LTV) is the share of a property’s value that a bank lends you. In Spanish you will see it called the relación préstamo-valor, the porcentaje de financiación, or simply “LTV”. If a bank offers you 70% LTV on a property valued at €300,000, it lends up to €210,000 and you fund the rest. The catch for buyers in Spain is that the “value” is the bank’s appraisal, not necessarily the price you agreed with the seller.

TL;DR

• LTV equals the loan amount divided by the property value, multiplied by 100. Spanish banks usually express it as porcentaje de financiación or LTV.
• Banks base it on the appraisal (valor de tasación or valor hipotecario), which can be lower than your purchase price.
• Lenders often cap non-resident lending below the level offered to residents, so plan for a larger deposit.
• LTV is only one test. Your income, debts and savings decide whether the bank reaches its maximum for you.
• Working backward from a realistic LTV before you make an offer avoids nasty surprises at signing.

Table of Contents

• What LTV means, and the Spanish words for it
• Which value does the bank use?
• What LTV limits apply in Spain?
• How LTV changes what you pay and how the bank treats you
• LTV is not the only test
• How to plan your LTV before you make an offer
• Our perspective
• Get your own LTV figure before you bid
• FAQ
• Sources

What LTV means, and the Spanish words for it

The Banco de España defines the LTV ratio as the mortgage principal divided by the appraised value of the property. The formula is simple: LTV = (loan amount / property value) x 100.

Here are the terms you will meet in Spanish bank documents, brokers’ emails and property listings:

The Banco de España also tracks the loan-to-price ratio, which divides the loan by the price recorded in the sale. The two numbers match only when the appraisal and the price are equal. If you want a plain-language primer on the loan itself, our guide to what a hipoteca is covers the basics.

Which value does the bank use?

This is the part most foreign buyers miss. A Spanish bank does not lend against your purchase price. It lends against the mortgage value set by an appraisal from an accredited company, which may differ from the sale price.

Under Ministerial Order ECO/805/2003, the mortgage lending value is a prudent assessment of the property’s future marketability, excluding speculative elements. In practice that means the appraiser looks at what the property could reliably sell for over the long term, not at how keen you or the seller are.

In most Spanish mortgages the bank applies its percentage to the lower of the appraisal and the price. That is a standard way lenders work, though each bank’s policy is its own, so confirm it for your case.

A worked example

Say you agree to buy an apartment in Málaga for €300,000, and the appraisal comes back at €280,000. The bank offers 70% LTV.

That €104,000 is before taxes, notary and registry fees, and legal costs. If the bank offered 60% instead, the loan would be €168,000 and you would need €132,000 toward the price. This is why it helps to check the likely appraisal before you commit, not after.

Energy performance now matters in valuations

Valuation rules are changing. According to the RICS guidance on bank lending valuations, Spanish regulations require Energy Performance Certificates for mortgage valuations, and valuers must factor energy performance into market value and mortgage lending value. The same guidance notes that after the 2025 amendment to Order ECO/805/2003, mortgage lending value may also be estimated with automated valuation models.

For you, that means the paperwork on the property matters. Before you rely on a figure, make sure the seller can supply a valid energy certificate, and check the habitability paperwork too: this overview of the certificate of habitability in Spain explains what buyers should ask for.

What LTV limits apply in Spain?

Spain has no single rule that says “you may borrow X%” for every buyer. What exists is a mix of legal reference points and each bank’s own risk policy.

The legal reference points. Royal Decree 716/2009 sets conditions for mortgage-market loans, the kind banks can use to back mortgage bonds. For those loans, the amount cannot exceed 60% of the appraised value, except for financing the construction, rehabilitation or acquisition of housing, where it may reach 80%. That 80% can be exceeded, up to 95%, if the loan has a guarantee from another credit institution or is covered by credit insurance, subject to the legal conditions.

The market reference. Industry analysts describe 80% LTV as the established reference for prudence on first-home mortgages. The Banco de España also reports an ongoing decline since 2008 in the share of loans above 80% LTV and LTP. As of 2022, its macroprudential tools could restrict LTV and loan-to-income, but none had been deployed because no systemic imbalances had been identified.

The bank’s own policy. This is where non-residents feel the difference. Banks treat buyers living abroad as a higher risk: the income is earned elsewhere, and recovering a debt across borders is harder. Many banks therefore lend non-residents a lower percentage than residents buying a main home. Commonly quoted figures sit somewhere around 60% to 70%, but every bank sets its own limit and changes it over time, so treat any number as a planning figure until you hold a written pre-approval.

For the full eligibility picture, see our guide to mortgage eligibility for non-residents and the non-resident mortgage guide.

How LTV changes what you pay and how the bank treats you

LTV decides two things at once: how much you can borrow and how much you contribute. The Tinsa guide puts it plainly: LTV determines how much can be borrowed and how much the buyer must put in from savings.

It also shapes the terms. A higher LTV means more risk for the bank, which may lead to stricter conditions or a higher interest rate. So a bigger deposit can do more than lower your loan. It may improve the offer you receive.

Here is how a €250,000 appraisal looks at different LTVs:

These figures assume the price equals the appraisal. Add your purchase taxes and fees on top. You can test your own numbers with the Spanish mortgage calculator.

LTV is not the only test

A bank can approve a high LTV on paper and still offer you less. As the Banco de España’s valuation guidance explains, whether a lender grants the loan depends not only on the appraisal but also on the applicant’s ability to pay.

The second ratio is debt-to-income. Lenders generally consider a repayment effort of about 30% to 35% of net monthly income prudent. Your bank will look at:

• Income and its source. Salary, self-employment or rental income, and the currency it arrives in. If you are paid in dollars or pounds, read our guide on foreign currency income.
• Existing debts. Car loans, other mortgages and credit cards reduce what a bank will lend.
• Savings after the deposit. Banks like to see reserves left over once you have paid your share and the purchase costs.
• Credit history. Spain does not work like the US system, but lenders still check your record. See how Spanish lenders judge you.
• Age and term. Most banks set a maximum age at the end of the loan, which can shorten the term and raise the repayment.

The interest type also affects repayments and therefore affordability. Our comparison of fixed vs variable Spanish mortgages shows how.

How to plan your LTV before you make an offer

1. Set a budget from the deposit, not the price. Decide how much cash you can commit, including taxes and fees, then work backward at 60%, 65% and 70% LTV to find the price range that fits.
2. Treat the appraisal as a risk. If you pay above market value, you cover the gap. Ask the agent how the asking price compares with recent sales nearby.
3. Check the paperwork early. An energy certificate and clear title help the appraisal and the bank’s legal review run smoothly.
4. Get a written pre-approval. A planning figure is not an offer. A pre-approval from a bank shows the LTV, rate and term it will actually consider for you.
5. Compare more than one bank. Banks differ on LTV for non-residents, on income they accept and on pricing. One refusal does not mean every bank will refuse.

Our perspective

Most non-resident buyers come to us asking “how much will the bank lend?” The better question is “how much will each bank lend against this property, for a buyer like me?” The answer changes from bank to bank, and it changes with the appraisal, your income and the way your file is presented.

That is why we work with several Spanish banks that lend to international buyers rather than a single lender. When one bank’s LTV or income rules do not suit your situation, another may fit better, and you see the options side by side instead of guessing.

We also believe the cost of the process should be clear from the start. Our assessment is free, and our fees are published: a sign-up fee that is refundable if pre-approval fails, and a success fee on a mortgage we arrange. Our goal is a written pre-approval you can use to make an offer with confidence, which in our experience takes an average of 14 days.

Mirelle Leguia

Get your own LTV figure before you bid

If you are planning a purchase, refinancing or construction project in Spain, we start with a free assessment and compare the banks that lend to non-residents. Our sign-up fee is €795, refundable if we do not secure your pre-approval, and our success fee is 0.70% on a successfully arranged mortgage. You can see how each fee works on our fees page.

Ready to see what a bank may lend you? Explore our mortgages for non-residents and request your assessment.

FAQ

What does loan to value mean in Spanish?

The closest phrases are relación préstamo-valor and porcentaje de financiación, though Spanish banks and appraisers also use the English abbreviation “LTV” directly. It describes the loan as a percentage of the appraised property value. A 70% LTV means the bank finances 70% and you fund 30%.

Is LTV based on the price I pay or the appraisal?

Banks base it on the appraisal, known as the valor de tasación or mortgage value, which may differ from the sale price. In practice, lenders usually apply their percentage to the lower of the two figures. If the appraisal comes in under your price, you cover the difference with your own money.

What is a good LTV ratio in Spain?

A lower LTV is safer for the bank and usually gives you better terms. Spanish practice treats 80% as an established reference for first-home mortgages, while non-residents should plan for a lower percentage. The best figure for you is the one that leaves a comfortable reserve after you pay the deposit and costs.

What does 90% LTV mean, and can a non-resident get it?

A 90% LTV means you borrow nine-tenths of the value and pay one-tenth yourself. Spanish law allows high ratios only in specific cases, such as loans with a bank guarantee or credit insurance, and banks are rarely this generous to non-residents. Plan for a larger deposit and ask for a written pre-approval to see what is really on offer.

Sources

• Limits and conditions on lending, Banco de España
• Límites y condiciones sobre concesión de préstamos, Banco de España
• ¿Qué es el Loan to Value o LTV en una hipoteca?, Tinsa
• What is the mortgage value?, Bankinter
• Orden ECO/805/2003, BOE
• Bank lending valuations and mortgage lending value, RICS
• Real Decreto 716/2009, BOE
• The mortgage appraisal system in Spain, Banco de España
• Tasación para la concesión de préstamos y créditos hipotecarios, Banco de España
• ¿Cuánto dinero puedo pedir en una hipoteca?, Avantio

Recommended

• What Is an “Hipoteca”? The Spanish Mortgage Explained
• Mortgage Eligibility in Spain: Can You Qualify as a Non-Resident?
• Fixed vs Variable Spanish Mortgages
• Getting a Spanish Mortgage With Foreign Currency Income

This article was produced with AI assistance and reviewed for accuracy by Mirelle Leguia, and expert in the Spanish mortgage space.