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Understanding deposit requirements is crucial for anyone planning to buy property in Madrid.
Non-residents need to prepare between 30-40% as a deposit, while Spanish residents typically require 20% down. However, the total cash needed extends far beyond just the deposit, with additional purchase costs adding another 10-15% to the property price.
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Non-residents need 30-40% deposit plus 10-15% additional costs when buying in Madrid.
Spanish residents require 20% deposit with the same additional purchase costs.
| Buyer Type | Minimum Deposit | Bank Coverage | Total Cash Needed (€300k property) |
|---|---|---|---|
| Non-Resident | 30-40% | 60-70% | €120,000-€165,000 |
| Spanish Resident | 20% | Up to 80% | €90,000-€105,000 |
| Central Madrid Price/m² | €6,000 average | ||
| Suburbs Price/m² | €2,300-€3,500 | ||
| Additional Costs | 10-15% of property value | ||
| New Build Premium | 5-10% higher deposit often required | ||
What is the minimum deposit percentage required by Spanish banks for non-residents buying property in Madrid?
Spanish banks require non-residents to provide a minimum deposit of 30-40% when buying property in Madrid.
This higher deposit requirement reflects the increased risk banks perceive when lending to overseas buyers. Most Spanish banks will only finance 60-70% of the property value for non-residents, regardless of their income or creditworthiness.
The exact percentage within this range often depends on factors such as your income stability, existing relationship with the bank, and the specific property type. Premium banks may offer slightly more favorable terms for high-net-worth clients.
As of September 2025, this 30-40% requirement remains standard across all major Spanish banks operating in Madrid's residential market.
What is the minimum deposit percentage required for Spanish residents buying property in Madrid?
Spanish residents typically need to provide a 20% deposit when purchasing property in Madrid.
This standard rate applies to most conventional mortgages for Spanish tax residents. Banks can finance up to 80% of the property value, making homeownership more accessible for local buyers compared to non-residents.
However, some banks may require higher deposits depending on your employment status, income level, or credit history. Self-employed individuals or those with irregular income might face deposit requirements of 25-30%.
First-time buyers under certain age thresholds may qualify for special programs that could reduce this deposit requirement slightly.
What is the average property price per square meter in central Madrid right now?
The average property price per square meter in central Madrid is approximately €6,000 as of September 2025.
Prime neighborhoods like Salamanca, Chamberí, and Retiro often exceed €9,000 per square meter. The most exclusive areas near Retiro Park or along Paseo de la Castellana can reach €12,000-€15,000 per square meter.
Mid-tier central districts such as Malasaña, Chueca, and parts of Centro typically range between €5,000-€7,000 per square meter. These areas offer good connectivity and urban amenities at relatively more affordable prices.
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What is the average property price per square meter in Madrid's outskirts or suburbs?
Property prices in Madrid's outskirts and suburbs range from €2,300 to €3,500 per square meter.
The most affordable districts like Villaverde, Carabanchel, Vallecas, and Usera typically fall within the €2,300-€2,800 range. These areas offer good value but require longer commutes to the city center.
Mid-range suburban areas such as Fuencarral-El Pardo, Hortaleza, and parts of Ciudad Lineal average €2,800-€3,500 per square meter. These neighborhoods provide better infrastructure and transport links while remaining relatively affordable.
Peripheral areas with metro connections generally command higher prices within this range, while those relying solely on bus transportation tend toward the lower end.
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How much deposit would I need if I target a €300,000 apartment in Madrid as a non-resident?
As a non-resident targeting a €300,000 apartment in Madrid, you would need a deposit between €90,000 and €120,000.
The lower end (€90,000) represents a 30% deposit, which is the minimum most banks will accept from non-residents. The higher end (€120,000) reflects a 40% deposit, which some banks require or which might be necessary for more favorable interest rates.
Banks typically prefer larger deposits from non-residents as it reduces their lending risk. A 40% deposit often results in better mortgage terms and faster approval processes.
Beyond the deposit, remember that you'll need additional cash for purchase costs, which we'll cover in detail later in this guide.
How much deposit would I need if I target a €300,000 apartment in Madrid as a resident?
As a Spanish resident, you would need a €60,000 deposit for a €300,000 apartment in Madrid.
This 20% deposit is the standard requirement for residents and applies to most conventional mortgage products. Spanish banks view residents as lower-risk borrowers due to their established presence in the country.
Some banks may offer mortgages with deposits as low as 10-15% for residents with excellent credit profiles, stable employment, or existing banking relationships. However, these deals typically come with higher interest rates.
Young buyers under 35 may qualify for special financing programs that could reduce the deposit requirement further, though availability varies by bank and current market conditions.
Do banks in Madrid require higher deposits for new developments compared to second-hand properties?
Yes, banks in Madrid often require higher deposits for new developments, typically 5-10% more than for second-hand properties.
New construction projects carry additional risks for lenders, including potential construction delays, developer financial issues, or market changes during the building process. Banks compensate for these risks by requiring larger deposits.
Many new developments also require staged payments during construction, meaning you might need to pay portions of your deposit at different construction milestones rather than just at completion. This ties up more of your cash for longer periods.
However, new builds often qualify for reduced VAT rates or other incentives that can offset the higher deposit requirements, making them still attractive to many buyers.
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Are there additional upfront costs in Madrid beyond the deposit, and how much are they?
Yes, additional upfront costs in Madrid add approximately 10-15% to the property purchase price on top of your deposit.
| Cost Type | Percentage | Amount on €300k Property |
|---|---|---|
| Transfer Tax (ITP) - Resale | 6-10% | €18,000-€30,000 |
| VAT (IVA) - New Build | 10% | €30,000 |
| Notary Fees | 0.5-1% | €1,500-€3,000 |
| Property Registry | 0.2-0.5% | €600-€1,500 |
| Legal Fees | 1-2% | €3,000-€6,000 |
| Mortgage Arrangement | 0.5-1% | €1,500-€3,000 |
| Total Additional Costs | 10-15% | €30,000-€45,000 |
What percentage of the property value do banks usually cover in Madrid with a mortgage for non-residents?
Spanish banks typically cover 60-70% of the property value with a mortgage for non-residents buying in Madrid.
This means that even with the minimum 30% deposit, banks may only finance 70% of the property value, effectively requiring a 30% down payment. More conservative banks might only lend 60%, requiring a 40% deposit from non-resident buyers.
The exact percentage depends on factors such as your income level, employment stability, existing assets, and the specific property being purchased. Properties in prime locations may qualify for higher loan-to-value ratios.
Some premium banks offer up to 75% financing for high-net-worth non-resident clients, but these deals typically require significant income documentation and substantial assets held with the bank.
What percentage of the property value do banks usually cover in Madrid with a mortgage for residents?
Spanish banks typically cover up to 80% of the property value with a mortgage for residents in Madrid.
This standard 80% financing means residents need a 20% deposit for most conventional mortgages. Banks view residents as lower risk due to their established presence and tax obligations in Spain.
Some banks offer up to 85-90% financing for residents with excellent credit profiles, stable employment, and strong banking relationships. However, higher loan-to-value ratios usually come with stricter income requirements and higher interest rates.
Government-backed programs for young buyers or first-time purchasers may offer financing up to 95% of the property value, though these programs have specific eligibility criteria and limited availability.
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How much cash should I realistically have available if I want to buy a mid-range property in Madrid today?
For a mid-range property in Madrid (around €300,000), you should have between €90,000-€165,000 in cash available, depending on your residency status.
1. **As a Spanish resident**: €90,000-€105,000 total cash needed - €60,000 for the 20% deposit - €30,000-€45,000 for purchase costs and fees 2. **As a non-resident**: €120,000-€165,000 total cash needed - €90,000-€120,000 for the 30-40% deposit - €30,000-€45,000 for purchase costs and fees 3. **Additional cash considerations**: - Emergency fund for unexpected costs - Furniture and immediate renovation needs - First few months of mortgage payments - Property insurance and community fees 4. **Regional variations within Madrid**: - Central areas may require 20-30% more cash - Suburban properties may require 15-20% less cash 5. **Seasonal timing factors**: - Spring purchases often require higher budgets due to increased competition - Winter purchases may offer better negotiation opportunitiesAre there government programs or incentives in Madrid that can reduce the deposit amount required?
Yes, there are regional and national programs in Madrid that can help reduce deposit requirements, particularly for young buyers and first-time purchasers.
The Madrid regional government offers programs for buyers under 35 years old that can provide guarantees allowing banks to offer financing up to 95% of the property value. These programs effectively reduce the required deposit to just 5-10% of the purchase price.
National programs include the ICO (Instituto de Crédito Oficial) guarantees that help first-time buyers access better mortgage terms. These programs can secure financing up to 80-85% even for buyers who wouldn't normally qualify for such high loan-to-value ratios.
However, these programs have strict eligibility criteria including income limits, property price caps, and age restrictions. Availability also depends on annual budget allocations and may not be available year-round.
It's something we develop in our Spain property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding deposit requirements is just the first step in Madrid property investment success.
The total cash needed extends well beyond the deposit, with purchase costs, taxes, and fees adding significantly to your upfront investment.
Sources
- InvestRopa - Spain Non-Residents Mortgage Guide
- Idealista - Spanish Mortgage Deposit Requirements
- InvestRopa - Average Apartment Price Madrid
- InvestRopa - Madrid Price Per Square Meter
- Coming to Spain - Mortgage Guide
- Alegria Real Estate - Spain Mortgage 2025
- Expatica - Spanish Mortgage Guide
- Idealista - Costs and Taxes Buying Spain