Finance

The most important facts in brief

A property in Mallorca can also be financed with a loan from a German bank.
Dr. Klein's offer also includes PSD Bank Rhein-Ruhr, which specializes in financing in Mallorca and Ibiza.
For German banks, financing with an annuity loan with a fixed interest rate predominates.
In Spain, variable interest rates are more common for construction financing.
In Spain, real estate financing is often linked to additional fees and products. That doesn't exist in Germany.

Financing with a German bank

If you choose a German banking partner, you usually finance the property in Mallorca with an annuity loan. This means that you agree on a fixed interest rate for a certain period of time, often 10 years. After the fixed interest rate, there is a residual debt that you can either pay off or continue to finance with follow-up financing.

According to Dr. Klein Trend Indicator Construction Financing, over 70% of real estate financing in Germany is processed via an annuity loan.

The special features of an annuity loan include the following points:

Stable construction interest rates
Long fixed interest rate
Special right of termination
Familiar loan processing

This means that you can enjoy all the advantages of a German bank for real estate financing in Mallorca. You can find out what conditions you currently get for your loan using our construction interest calculator.

Financing with a Spanish bank

In contrast to German banks, Spanish banks like to grant loans with variable interest rates. The variable interest rate is based on an average interest rate, the Euro Interbank Offered Rate (EURIBOR for short).

It is determined from the information provided by over 20 European banks.

Since it is set every 3 months, it fluctuates. This means that interest rates can rise or fall again and again over the loan term.

This results in the following disadvantages:

little planning security
Additional costs if interest rates rise

There is also the possibility of concluding a fixed-rate offer with a Spanish bank. This is comparable to the full repayment loan known in Germany. You pay off the complete loan for your house in Mallorca over a fixed period of time, usually up to 20 years. After that, the loan is paid off and there is no remaining debt. However, you have a higher monthly instalment than with the annuity loan and thus a higher financial burden every month.