News: Clever mortgages' boost for Spain

Mon, 14 Jan 08

Selling property in Spain is taking longer and longer these days...

According to a Spanish national chain of estate agents, Don Piso, the average time it takes to sell an apartment has increased by over 40% over the last two years from 86 days in 2005 to 120 days in 2007.

This trend is being felt markedly on the Costa del Sol as the property market eases its way out of a boom and into a period of normality. However, there is good news for those who want to up- or down-grade their home in Spain but haven’t managed to sell, and that’s a ‘Cambio de Casa’ mortgage.

Cambio de Casa (literally meaning ‘Change of House’) is a clever mortgage which enables you to move without having achieved a sale on your current home. This particular product, available through The Spanish Mortgage Exchange, offers a three month mortgage holiday and then two years worth of repayments equivalent to your existing mortgage subject to a valuation on the property.

Effortless changeover

If in the unlikely event that you have not sold by year two, the two mortgages would be rolled together and paid on an interest-only basis until year five or the property is sold, whichever comes soonest. Upon sale, the mortgages are adjusted by the bank for a smooth, effortless switch over. Meanwhile, the homeowner is able to take rental income from their first home at the same time as enjoying their new home. The scheme is flawless.

Adam Gale, MD of Costa del Sol estate agent Duchy Estates comments, “This Cambio de Casa system is ideal for today’s slower moving market. The Costa del Sol isn’t all about holiday homes, there are plenty of permanent expat residents here and this product will mean that they don’t have to rush through a sale to snap up the new house of their dreams but instead can sit back and achieve a sensible price for their home without being hit financially with hefty mortgage repayments. I have seen one to two year Cambio de Casa offers, but never for five years, so this is truly the best option available on the market.”

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