Not every senior citizen in Spain wants to sell their property to earn more money. And they don't have to – there's a financial product that allows you to unlock the equity tied up in your apartment or house without having to sell it. We're talking about a reverse mortgage .
Although this solution is not for everyone, in some situations it can be a real support – especially for older people who live in Spain permanently and own property.
What is a reverse mortgage?
Simply put, it's the reverse of a traditional mortgage. In a "standard" loan, you pay the bank installments. In a reverse mortgage, the bank pays you the money. The collateral is your property, but you don't lose ownership of it—you can live in it for the rest of your life.
In practice, you receive a fixed amount each month (or the entire amount upfront), and the debt is repaid only after your death – usually by your heirs, who can:
- pay off the debt and keep the property,
- sell the property and cover the liability from the proceeds,
- renounce the inheritance (if the debt turns out to be higher than the value of the property – which should not happen in well-drafted contracts).
Who can benefit from it?
This product is aimed primarily at people aged 65+ who own a flat or house in Spain. Key terms:
- full ownership or co-ownership of the property,
- minimum age (usually 65 years),
- no large debt on real estate,
- usually permanent residence in a given property.
Some banks also accept a second home as collateral, but the basis is usually the so-called vivienda habitual – that is, the place where you actually live.
How much can you get?
It depends on:
- your age (the older the person, the higher percentage of the apartment value they can receive),
- property value (assessed by an independent appraiser),
- selected payment model (monthly annuity, lump sum, credit line).
For example, on a €350,000 apartment, a 70-year-old person could get €100,000–150,000. But remember: interest accrues throughout the term of the agreement, so the final debt will be higher than the payout amount.
How can you receive money?
You have several options – and this is a big advantage of this solution:
- monthly pension (fixed income, like a second pension),
- a one-off payment (e.g. to pay off other debts or help children),
- a line of credit – money for a “rainy day” that you withdraw only when you need it,
- mixed model (part in advance, the rest monthly).
Is it worth it?
It depends on the situation. In some cases, yes, it is. Especially for single people who don't plan to leave a property as an inheritance, or for those with a modest retirement income who want to improve their quality of life without selling their home.
However, it's worth carefully considering everything and analyzing the contract provisions, preferably with a financial advisor or lawyer. It's also important to compare this product with other options: for example, a traditional loan, a sale with a rental option, or a long-term lease.
Frequently asked questions
Do children lose the property upon the owner's death?
No – they can keep it by paying off the bank, sell it and keep the surplus, or renounce the inheritance.
Are withdrawals from this loan taxable?
Typically not – they are treated as a withdrawal of capital, not income.
Can you rent an apartment with this type of loan?
Usually yes, but you need to check the specific terms of the agreement. Some institutions may restrict rental options.
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