Owning property in Spain offers more than just a place to live—it can be a powerful financial asset. Whether you’re an expat looking to free up capital, a retiree seeking additional income, or a homeowner wanting to invest in new opportunities, equity release allows you to unlock cash from your property without selling it.

This guide explains how equity release works in Spain, the best options available, and how to determine if it’s the right financial move for you.

What Is Equity Release and How Does It Work in Spain?

Equity release allows homeowners to access the cash tied up in their property while continuing to own and live in it. Unlike a traditional mortgage, where you borrow to buy a home, equity release lets you borrow against your existing home’s value, providing a lump sum, regular payments, or a flexible credit line.

In Spain, equity release is popular among expats, retirees, and property investors looking for financial flexibility without selling their homes.

Some key features of equity release in Spain include:

• Available to property owners aged 55 and older (for lifetime mortgages) or anyone with sufficient equity (for secured loans).
• Loan-to-value (LTV) ratios typically range from 20% to 60%, depending on the lender and applicant profile.
• No need for monthly repayments in some options, such as lifetime mortgages.
• Funds can be used for any purpose, including reinvestment, home improvements, or supplementing retirement income.

Best Ways to Release Cash From Your Home in Spain

There are several ways to free up capital from your Spanish property. The right option depends on your financial situation and goals.

Home Equity Loan (Secured Loan)

A home equity loan allows you to borrow a lump sum secured against your property, repaid over time with interest. It is ideal for those needing immediate cash for investments, business funding, or debt consolidation.

This option is best for expats and property owners needing a fast, secured loan. However, it requires monthly repayments, which may not suit retirees.

Lifetime Mortgage (Reverse Mortgage for Retirees)

A lifetime mortgage lets homeowners aged 55 and older borrow against their home’s value without monthly repayments. Instead, the loan, plus interest, is repaid when the homeowner sells, moves into long-term care, or passes away.

This is an excellent option for retirees needing long-term financial security, but it does reduce the inheritance value of the home.

Sell & Stay Arrangements

Some private lenders offer schemes where you sell a portion of your home while retaining the right to live there. This option is useful for those who do not want the responsibility of a loan but need liquidity.

This can be a good choice for older homeowners who want to stay in their home while unlocking cash, but it does involve partial loss of ownership.

Refinancing Your Mortgage

If you have an existing mortgage, remortgaging can help you free up equity. This works well for homeowners with significant property appreciation who want to restructure their finances.

This option is best for homeowners with an existing mortgage seeking better terms. However, it depends on credit history and lender approval.

Why Expats Choose Equity Release in Spain

Many expats and foreign property owners use equity release to access capital while keeping their property in Spain. Some of the main reasons include:

• Supplementing retirement income without selling assets.
• Using home equity to buy additional properties or fund businesses.
• Avoiding large withdrawals from taxable investments or pensions.
• Accessing cash quickly compared to traditional loans.

Top Lenders for Equity Release in Spain

Finding the right lender is crucial for securing the best terms. Here are the most common options:

Traditional Banks (BBVA, Santander, CaixaBank)

Spanish banks offer home equity loans but typically require high income proof and strong credit history. They may not be the best option for expats without a stable Spanish income.

This option is best for residents with high income and strong credit history. However, eligibility criteria can be strict, and approval times may be slow.

Private Lenders and Kredit Spain (Best for Expats and Non-Residents)

Since 2019, Spanish banks have made it harder for expats to borrow due to stricter mortgage laws. Kredit Spain offers a flexible alternative, specializing in secured loans for expats who want to unlock home equity without strict income proof.

Kredit Spain is an excellent option for expats, retirees, and non-residents due to its fast approvals and flexible repayment structures. However, interest rates may be higher than traditional bank loans.

Alternative Lenders (International Banks, Specialist Mortgage Providers)

Some international banks and specialist lenders cater to expats but may require assets in other countries as collateral.

This option is best for expats with assets abroad but may involve a more complex approval process.

Pros and Cons of Releasing Cash From Your Property

Equity release has several advantages and considerations.

Pros

• Unlocks cash while keeping your home.
• No need for monthly repayments in some cases.
• Flexible options for expats and retirees.
• Can be used for any purpose.

Cons

• May reduce property inheritance value.
• Interest accumulates over time.
• Some options require income verification.
• LTV limits may restrict borrowing amounts.

Conclusion: Is Equity Release Right for You?

If you are a homeowner in Spain looking to unlock the value of your property, equity release can provide financial freedom without selling your home. Whether you need funds for investment, retirement, or major expenses, choosing the right option is key.

For expats and retirees, Kredit Spain offers a faster, more flexible alternative compared to traditional banks, especially if you struggle with income verification.

Want to explore your options? Contact Kredit Spain today to see how you can release cash from your home in Spain.