Frequently Asked Questions — Private Property Finance in Spain
Direct answers to the questions borrowers ask most about private property finance in Spain. Monec arranges loans secured against residential property — typically €250k to €10m or more, up to 50% of market value, at 8–12% per annum, completing in 2–4 weeks. Most things depend on the specific financier or project — where they do, we say so.
The basics
Is this the same as a bridge mortgage from a bank?
No. A bank’s bridging mortgage is a consumer product for buying a new home before selling the current one. The private-capital bridge financing Monec structures is different: loans to companies, secured by a mortgage, for liquidity, refinancing, equity release or development — from €250k to €10m or more, completing in 2–4 weeks.
Costs
What does a bridge loan cost in total in Spain?
Total cost = interest + arrangement fee + third-party costs. Interest is typically 8–12% per annum. An arrangement fee applies, agreed per mandate before work begins. Third-party costs include the valuation (paid by the borrower), notary and registry fees (regulated tariffs), gestoría and legal costs (vary by deal and financier), and AJD stamp duty. We set out the full cost table — gross loan, deductions, net amount to you — before anything is signed.
Who pays the AJD stamp duty on a mortgage loan in Spain — and what is it?
AJD (Actos Jurídicos Documentados) is the Spanish stamp duty payable when a mortgage is registered. By law, the lender pays it on mortgage loan deeds (Real Decreto-ley 17/2018); in practice, lenders recover this cost through the arrangement fee. The rate varies by region — roughly 0.5% to 2% — and is calculated on the total mortgage liability registered, which is commonly around 1.5 times the loan amount, not the loan amount itself.
What are the notary and registry costs?
Notary and Land Registry fees follow regulated tariffs (aranceles) and scale with the registered mortgage liability. Gestoría and legal costs vary considerably by deal, structure and financier. All are itemised in the cost table before signing.
How much does the valuation cost, and who pays it?
The borrower pays for the valuation (tasación). For most residential properties it runs from a few hundred euros to over a thousand; large, complex or unusual properties can cost significantly more. We work regularly with valuation companies across Southern Spain, know which are quick and professional, and obtain quotes on your behalf — organising the valuation is a routine part of our service.
Are there costs if the loan doesn’t complete?
Generally, only third-party costs already incurred — for example, a valuation you ordered and paid to the valuer is not refunded. Some financiers may require certain fees earlier in the process; this varies case by case, and we make the position clear before any cost is committed.
Can I repay the loan early?
Often yes, though many private financiers apply a minimum interest period — typically 3 to 6 months. Conditions differ from financier to financier, and this is where our model matters: if early repayment is a priority for you, we arrange the financing with financiers who have no minimum period, or one that fits your plan. There is usually a trade-off — perhaps a slightly lower LTV or a somewhat higher arrangement fee — and our job is to understand what matters most to you and match it against the criteria of the financiers we work with.
What happens if I can’t repay at maturity?
Talk to us early — that is the honest answer. If the exit is delayed, an extension can often be negotiated with the financier, on terms agreed case by case. The worst approach is silence until the maturity date; the best outcomes come from restructuring the timeline while there is still room to manoeuvre. A refinancing with a new lender is also a common solution — one of the most frequent situations we handle.
Process
How does the process work, from first contact to money in the account?
Four steps: (1) a focused first conversation — property, need, exit — where we tell you honestly whether the financing fits; (2) we prepare a professional financing note; (3) we present the case to the financiers whose criteria genuinely match; (4) terms, valuation, legal and notary through to drawdown. From complete documentation, completion typically takes 2–4 weeks.
What documents do I need before contacting you?
None — contact us first, and we sort out the rest. The first step is a conversation, by email, WhatsApp or a call, where we understand your case and can often give an indication based on what you tell us alone. The key document is the valuation: for a bridge loan, essentially just the valuation; for development finance, also the business plan and the licences confirming what can be built. No valuation? Not a problem — we regularly organise valuations for clients, know which valuers are quick and professional, and obtain the quotes for you to confirm. Without a valuation we need the property’s nota simple, and if you don’t have that either, the exact address is enough — we obtain the nota simple ourselves. Corporate and other due diligence documents come later, after a term sheet is issued and accepted.
What happens at the notary on completion day?
Everything happens in a single act: the loan deed is signed, any existing charges are repaid and cancelled, the new mortgage is registered, and funds are disbursed. The transition from old financing to new happens in the same signature.
What if the valuation comes in lower than expected?
The loan is sized against the actual valuation, so a lower figure means a lower maximum loan — we discuss the options with you before proceeding further, and nothing is committed until you decide. Because we work with several valuation companies, we also have a realistic view of value before the formal report, which keeps surprises rare.
Eligibility and structure
Why must the borrower be a company?
Lending to companies and lending to private individuals are different businesses in Spain, governed by different legislation and served by different specialists. Monec specialises in financing companies: the projects are different, the amounts are larger, and the regulatory framework is different. The borrower should be a Spanish company, though non-Spanish final beneficiaries are acceptable.
I own the property personally — can a Spanish company be set up for the loan?
Yes — this is very common, particularly for international owners. The structure is set up as part of the transaction, and the legal advisors coordinate it routinely.
Do I need to prove income, or is the lending asset-based?
Private lending is primarily asset- and exit-based: the financier’s focus is the property, the loan-to-value and a credible repayment route — a sale, a refinancing, a liquidity event. Banks are the opposite: they underwrite mainly against a stable, constant income history. High income years ago that has since fallen, or high income that only started recently, is typically a problem for a bank — and irrelevant to a private financier if the asset and exit are sound.
Does the loan appear in CIRBE?
Loans from private, non-bank financiers are generally not reported to CIRBE (the Bank of Spain’s credit register), unlike bank facilities. Specific cases can differ — ask us about the financier in question.
When does a private lender make more sense than a bank?
Three situations. First, when the bank says no: banks underwrite mainly against stable, documented income rather than the collateral, so many sound borrowers simply do not fit their criteria. Second, when speed matters: private lending completes in weeks, not months. Third — less obvious — when the bank’s conditions cost more than the private financing’s pricing: a bank may, for example, require a large share of units pre-sold off-plan before releasing development funding, and every off-plan unit is typically sold at a significant discount that comes straight out of the developer’s margin. Counting all costs, the private route can end up cheaper in total, not just faster.
Security and trust
What security does the lender take?
A first-ranking mortgage on the property is the standard. For the right case we also have financiers prepared to lend against a second mortgage — particularly valuable when a cheap, long-term bank mortgage is already in place and only additional shorter-term capital is needed: refinancing the whole facility to free the first rank would replace inexpensive long-term money with more expensive short-term money. A second-mortgage financier charges somewhat more, but the total cost to you is usually far lower than a full refinancing. Depending on the case, other guarantees can also form part of the structure.
Is private lending to companies regulated in Spain?
Lending to companies does not require a licence in Spain — the licensing and consumer-protection framework (including the Banco de España intermediary register) applies to lending involving private individuals, which is a separate, differently regulated business. Monec works exclusively on company-to-company transactions, and every loan is formalised before a notary and registered in the Land Registry, exactly like a bank mortgage.
Is Monec a broker?
No — Monec works as an originator. Our financiers are high-net-worth individuals, family offices and asset managers, many of whom have no office or presence in Spain: we do the local work for them — sourcing, due diligence, valuation, structuring, monitoring. In many cases they lend only through us and do not work with other intermediaries. Many are not professional lenders specialising in the Spanish market at all, but investors diversifying their portfolios with secured real estate debt. This is a different model from a mortgage broker shopping your file to the same lender panel everyone else uses.
How do I know a private lender is safe?
Three checks protect you regardless of who you talk to. First: never pay unjustified upfront fees — legitimate costs early in the process are third-party costs like the valuation, paid to the valuer, not to an intermediary. Second: the loan must be formalised before a Spanish notary and the mortgage registered in the Land Registry — always. Third: demand a written cost table — gross loan, every deduction, net amount to you — before signing anything. We put that table on the table as standard.
How is Monec paid?
Through a structuring fee (arrangement fee), agreed per mandate before work begins. Our pricing is competitive and, wherever the case allows, shaped to meet the client’s interests — the fee reflects the complexity and size of the transaction, and it is always on the table before you commit to anything.
Our services: Bridge Loans · Development Finance · Equity Release · Refinancing · For Investors