Glossary of Spanish Mortgage Terms

Mortgage – In Spanish “Hipoteca”, pronounced with a silent H.

Offer in principle – In Spanish “Oferta Vinculante”

Early repayment fee – In Spanish this is called “Comision de amortización anticipada”

Loan to Value (LTV) – The relation between the loan and the value of the property. The bank will loan you up to a certain percentage of the value of the property you’re purchasing. The exact figure will depend on the specific circumstances of the individual.

Debt To Income (DTI) – The relation between your income and your loans. The banks will only accept that you pay up to a certain percentage of your gross income to pay off loans.

Subrogation of a mortgage – Change your mortgage to another bank. Note that this will imply certain fees to be paid.

TAE (Tasa Anual Equivalente) – To know the actual cost of the mortgage, TAE is the number we need to study. The TAE is the result of a mathematical formula which includes the interest rate, the commissions and the term of the operation.