We tell you how are the mortgages for second homes in the Canary Islands and we look for the mortgage with the best conditions for the purchase of your home.
The Canary Islands is one of the autonomous communities in which fewer homes are financed. This can be seen quarter after quarter from the data provided by the Association of Registrars. Specifically, during the second quarter of 2024, only 47.5% of the homes purchased in the Canary Islands required financing, with the Spanish average standing at 63.8%.
Furthermore, the amount to be financed in the Canary Islands is also lower than the average amount requested in Spain. If in Spain the average mortgage is 145,229 euros, in the Canary Islands this figure is reduced to 119,519 euros. The predominant investor profile among buyers in the islands and the favorable conditions of the Canary Islands when buying a property (lower price per m2, less taxes…) are some of the factors that make these figures possible.
“The Canary Islands is one of the communities where fewer homes are financed and where the amount to be financed is lower.”
Even so, during the second quarter of 2024, 2,956 mortgages were registered in the Canary Islands, a not insignificant figure that makes Destiny Home have its own financial department, a way to provide this customer profile, the one that needs financing for its acquisition, with the financial service it deserves.
What are second home mortgages like?
The first thing you should know to understand the operation of mortgages for second homes in the Canary Islands, is that this type of product is a riskier operation for the bank than a mortgage for a regular home. This is so because if the client suffers economic problems, the first thing that normally stops paying is the mortgage of his second residence.
This higher risk is translated by the financial entities into less favorable conditions than those offered for mortgages for regular homes, which means that having the support of a financial advisor allows us to save an even greater amount of money on this type of home.
Characteristics of second home mortgages in the Canary Islands
The main differences between a first home mortgage and a second home mortgage are as follows:
Lower amount to be financed
While for a regular home, financial institutions usually grant around 80% of the purchase price or appraisal, for a second home the amount financed does not usually exceed 60% or 70% of the value of the home. This obliges clients to have a higher level of savings when it comes to accessing the necessary financing.
Shorter repayment term
If the usual for a first home is to get a mortgage with amortization terms of up to 30 years, the usual for a second home is to get a mortgage with an amortization term that rarely exceeds 25 years.
Increased interest
Another of the characteristics associated with second home mortgages in the Canary Islands is a higher interest rate than that offered for first home mortgages. This obliges people acquiring a second home to assume higher mortgage payments and, therefore, require a higher level of income.
Additional warranties
In addition, banks often ask their customers to provide a guarantor or put another property as collateral for a second home mortgage.
What if I already have a mortgage and need another one?
It may happen that we want to finance a second home in the Canary Islands but we have not yet finished paying the mortgage on our primary residence. What options do we have in this case?
- To ask for a second mortgage: in this case, you would have to face two mortgages at the same time, so the bank would study your economic capacity in detail to make sure that you are going to be able to face two payments of these characteristics.
- Extend the current mortgage: it consists of changing the conditions of our mortgage loan by means of a novation. The bank offers us more money, so the amortization term is extended, however, we only have to pay one mortgage installment instead of two.
- Remortgaging the first home: this consists of cancelling the mortgage you already have on your primary residence and taking out a new mortgage on the same property but with a higher amount to cover the payment of your second home.
How to get the best conditions for your second mortgage
As we mentioned at the beginning, mortgages for second homes offer much less favorable conditions than those granted to first residences. For this reason, a small improvement in the interest rate or a slightly longer repayment period can make the difference between one mortgage loan and another.
We search and negotiate for you
In Destiny Home we know perfectly the different financing options available to those who want a second home in the Canary Islands. We know the different offers offered by each bank, their access requirements and the linked products that are really worth contracting.
Through our Financial Department we search, compare and negotiate the mortgage that best suits your needs so you don’t have to go from bank to bank looking for the best financing. At Destiny Home we not only take care of finding your ideal home, but we also make sure that you do it at the best price, something that directly affects the financing interest you pay for it.
If you are looking for a second home in Fuerteventura and need financing, in Destiny Home you can find the solutions you need: a single company but dozens of services at your fingertips.
We search, compare, and negotiate the best financing for your home
