Down Payment Spain
Minimum Down Payment to Buy Property in Spain
A €260,000 new-build needs ~€113,000 equity. Full cost breakdown, rental returns, capital growth, holiday value, and the reality of borrowing your deposit.
What You Need on the Table
Spanish banks lend non-residents a maximum of 60–70% of the purchase price. The remaining 30–40% must come as a cash deposit. But that deposit is only part of what you need—closing costs on a new build add another 13% on top. For a €260,000 new-build apartment in coastal Spain, here’s the full picture.
Where Your €112,546 Goes
New builds attract VAT and stamp duty rather than transfer tax. The combined 11.5% is slightly higher than the 8–10% transfer tax on resale properties, but you get structural warranties, modern energy ratings, and zero renovation costs. Use our Purchase calculator to model any price point.
The Numbers in Your Favour
With a €182,000 mortgage at 3.5% fixed over 25 years, here’s the monthly cash flow when you rent the apartment as a holiday let.
| Item | Monthly | Annual |
|---|---|---|
| Gross rental income (~55% occupancy) | +€1,200 | +€14,400 |
| Mortgage payment (3.5%, 25 yr) | -€910 | -€10,920 |
| Running costs (IBI, community, insurance, maintenance) | -€240 | -€2,840 |
| Net cash flow | +€50 | +€640 |
The property is cash-flow positive from day one—just barely. Rental income in coastal Spain is seasonal: peak summer weeks (July–August) command the highest rates and generate the bulk of annual income, shoulder months (May–June, September–October) produce solid bookings, and winter sees lower but steady demand from long-stay guests. The €1,200 monthly average reflects this mix across the full year.
But the rental cash flow is only part of the story. The real returns come from three other sources that don’t show up in your bank account each month.
Capital Growth
At 4% annual appreciation, a €260,000 property gains roughly €10,400 per year. After ten years at that rate, it would be worth ~€385,000.
Cheap Holidays
Five weeks of personal use saves ~€5,000 in accommodation you'd otherwise pay for. Your holidays are effectively free since vacancy is already accounted for in the rental figures.
Equity Buildup
Every mortgage payment reduces your loan balance. In year one alone, ~€4,550 of your payments go toward principal—money that comes back when you sell.
Add it up: €640 net cash flow, €10,400 in appreciation, €5,000 in holiday savings, and €4,550 in equity buildup. That’s roughly €20,600 in total annual return on €113,000 of invested equity. The cash return alone is modest, but the combined value is compelling—provided the equity is yours to begin with.
Model your own rental scenario with our Rental income estimator, or read our rental income guide for occupancy expectations by area and season.
What If You Borrow the Equity?
Some buyers raise the €113,000 by remortgaging their home or borrowing against other assets in their home country. It’s a legitimate strategy—but the numbers shift dramatically.
Instead of a property that carries itself, you’re now paying €690 per month—roughly €8,300 per year—from your income to sustain the investment. The appreciation, equity buildup, and holiday value are all still real. Over a 10-year horizon, the combined gains would likely outweigh the cash deficit. But the margin for error shrinks considerably.
A slow rental season, unexpected repairs, or interest rate changes on your home loan all eat into the return. Currency fluctuations add another variable if your income isn’t in euros. And unlike the own-equity scenario where you can ride out a bad year, double leverage means you need the cash flow from your day job to keep both loans current.
Own Equity
Borrowed Equity
If you have the equity available, the investment case is strong. If you’re considering borrowing to invest, stress-test the cash flow carefully—try our Mortgage calculator to model different rates and terms. For a full breakdown of financing options, see our finance and mortgage guide.
Run Your Own Numbers
Use our calculators to model any property price, mortgage rate, and rental scenario.
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