Tenerife is one of the most popular Canary Islands for foreign buyers — offering a mild climate year-round, great value for money, and strong rental demand. Whether you’re buying a holiday flat, villa, or rural finca, non-residents can secure a Spanish mortgage in Tenerife. This guide explains how to qualify, which banks to consider, and how to protect your investment legally.
☀️ Why Foreigners Buy in Tenerife
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🏖️ Affordable prices vs. mainland Spain
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🛫 Excellent air connections to Europe year-round
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🏘️ Popular areas: Costa Adeje, Los Cristianos, El Médano, Puerto de la Cruz
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🌍 Strong demand from UK, German, Scandinavian, Belgian, and Italian buyers
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💸 Good ROI on long-term and seasonal rentals
🏦 Can Foreigners Get a Mortgage in Tenerife?
Yes. Most major Spanish banks offer non-resident mortgages for purchases in Tenerife. While rural properties and coastal zones can present legal challenges, financing for urban and tourist-area homes is common and well-supported.
💶 Typical Mortgage Terms for Foreign Buyers in Tenerife
| Feature | Typical Range |
|---|---|
| Loan-to-Value (LTV) | 60–70% (based on bank valuation) |
| Deposit Required | 30–40% from buyer |
| Mortgage Term | 15–25 years |
| Interest Rate | Fixed: 3.5–4.5%, Variable: Euribor + 1.5–2% |
| Debt-to-Income Ratio | Maximum 30–35% |
📌 Higher down payments may be required for rural or non-urban properties.
🧾 Documents You’ll Need
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Valid passport
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NIE (Número de Identidad de Extranjero)
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Proof of income (salary, pension, or business income)
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Tax returns (1–2 years)
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Bank statements (3–6 months)
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Credit report from your home country
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Reservation contract or purchase offer
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Funds for down payment and closing costs
📌 All foreign documents must be officially translated and apostilled.
🏛️ Best Banks for Foreign Buyers in Tenerife
| Bank | Strengths in Tenerife |
|---|---|
| CaixaBank | Strong network, multilingual staff, good digital tools |
| Sabadell | Offers mortgage packages specifically for expats |
| Bankinter | Accepts self-employed and non-euro income sources |
| Cajasiete | Local Canary Islands bank with regional experience |
💡 Use a local mortgage broker to compare options and manage negotiations.
⚖️ Legal Considerations in Tenerife
Tenerife presents specific legal concerns such as:
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🌊 Coastal Law (Ley de Costas) for beachfront properties
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🧱 Rural land restrictions (suelo rústico or agricultural zoning)
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🚫 Limited short-term rental licenses in protected zones
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⚠️ Buildings with outdated or missing habitability certificates
A property lawyer ensures you:
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Don’t overpay for illegal or non-financeable homes
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Understand zoning and use limitations
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Sign safely via power of attorney
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Complete all notary and land registry steps correctly
💸 Taxes & Mortgage-Related Costs in Tenerife
| Cost Type | Typical Range |
|---|---|
| Property Transfer Tax (ITP) | 6.5% (standard in Canary Islands) |
| AJD (Mortgage Tax) | 0–1.5% depending on bank & property |
| Notary + Registry Fees | 1.5–2% of purchase value |
| Bank Arrangement Fees | ~0.5–1% of mortgage amount |
📌 The ITP rate in the Canaries (6.5%) is lower than in mainland Spain — a significant advantage.
❓ FAQs
Can I get a mortgage for a holiday rental property?
Yes — but check local rules. Some tourist areas limit short-term rentals to licensed buildings or exclude them entirely.
Can I buy and finance property remotely?
Absolutely. With legal representation and power of attorney, you can complete the entire purchase without traveling to Tenerife.
Will banks accept income in pounds, dollars, or other currencies?
Yes — major banks will assess income in your local currency, though it may affect your interest rate or LTV.
🤝 How We Help
At Borderless Lawyers, we specialize in helping foreign buyers:
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Apply for NIEs and open Spanish bank accounts
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Get pre-approved for a mortgage
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Review zoning and coastal law risks
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Close your Tenerife purchase securely — with or without travel
👉 Ready to finance your Tenerife property? Book a free consultation with our team.