Spanish Mortgage Terms - Glossary

Amortización ( Repayment)
Repayment of the loan by installments, made up of an amount of capital borrowed and an amount for the interest charged. Depending on the type of mortgage, these installments can be fixed for the life of the loan or vary with interest rate changes.

Cancelación anticipada - (Early Repayment or Early Redemption)
This means full or part repayment of the loan before maturity. In part repayments, you can choose to reduce the monthly installment and keep the agreed term, or keep the same installment but shorten the term.

Cancelación registral - (Register Discharge)
Once the loan has been repaid, the legal charge must be removed from the Land Register. This involves costs of Notary, Register and Solicitor.

Carga - (Encumbrance or Registered Charge)
Legal charges on a specific property entered in the Land Register, i.e. mortgages.

Cédula de Habitabilidad - (Occupancy Certificate)
This document certifies that the home is ready for occupation. This is required when setting up utilities, i.e. gas, electricity and water.

Comisión de apertura - ( Loan Arrangement Fee)
This is a percentage of the loan value charged for services rendered in granting and processing the mortgage.

Comisión de Cancelación Anticipada - (Early Repayment Fee)
This fee compensates the lender for the loss of interest payments expected for the period between the early redemption and the agreed maturity.

Diferencial - (Margin)
This is a set percentage which is added to the reference rate when setting the interest rate for each variable rate repayment mortgage.

Escritura Pública de Compraventa - (Deed of Sale)
This document legalises the purchase and is signed by both purchaser and vendor and by the notary. The purchaser obtains a first copy of the deed once all taxes have been paid and the legal charge has been input to the Property Register.

EURIBOR - European Inter-Bank Offered Rate.
An index that is published by the European Central Bank and is commonly used as the reference rate for variable rate mortgages.

Gestoría
The professional adviser who looks after dealings with the Register and the payment of taxes to the Tax Authority.

Hipoteca - (Mortgage)
A legal charge entered in the Property Register when a real estate property is assigned as collateral for a mortgage loan.

Impuesto sobre el valor añadido, IVA - (Value Added Tax, VAT )
Sales made directly by a developer (newly built homes), and resales, are subject to VAT. The current standard rate is 7% on the sale value for private sales and 16% for commercial sales.

Notario - (Notary)
The Notary acts as the official when signing public deeds, such as the sales or mortgage loan agreements. He is obliged to ensure that legislation is followed and to defend the interests of the parties, particularly of the borrower. Top