Bárbara Benítez

Buying a property involves much more than finding a home you like and checking whether you can afford the monthly mortgage repayments. Before reaching that stage, there is one key question that can influence the entire process: how much do you need to save to buy a property? As a general starting point, if you are taking out a conventional mortgage in Spain, it is advisable to have approximately 30% to 32% of the property’s purchase price in savings. However, the final amount will depend on the type of property, the region where it is located, the financing available and the buyer’s individual circumstances. Why so much? Because there are two separate amounts to consider. First, there is the portion of the purchase price that the bank will not normally finance. Then there are the taxes and other costs associated with the purchase. The Bank of Spain explains that the amount of a mortgage loan is directly linked to the property’s valuation and that financing can normally reach up to 80% of that value. This means that, in a conventional transaction, buyers should be prepared to contribute approximately the remaining 20% from their own funds. We must also factor in purchase taxes and other associated costs. For example, second-hand properties in Andalusia are generally subject to Property Transfer Tax (ITP) at a rate of 7%. Newly built properties, on the other hand, are subject to VAT and Stamp Duty (AJD), the standard rate of which in Andalusia is currently 1.2%. Therefore, working out how much property we can afford does not start with calculating the mortgage. It starts with calculating our savings. How much do you need to save to buy a property? As a simple rule of thumb, we can start with the following calculation: approximately 20% of the purchase price to cover the portion that the mortgage will not usually finance, plus an additional amount for taxes and other purchase costs. Our guide to the property purchase process recommends allowing for approximately 10% to 12% of the purchase price in additional taxes and expenses as a practical reference. However, the exact amount will vary depending on whether the property is a new build or a resale and the specific circumstances of the transaction. This is where the commonly quoted figure of around 30% to 32% of the property’s value in savings comes from. However, this should be understood as a general guideline rather than a mathematical formula that applies to every buyer. Imagine a property priced at €300,000. If the bank finances 80% of the amount considered for the transaction, the mortgage would be approximately €240,000, leaving us to contribute €60,000 towards the purchase price. Taxes and other acquisition costs would then need to be added to this amount. Having €60,000 in savings, therefore, does not necessarily mean that we can afford to buy a €300,000 property. We must also retain enough liquidity to cover the entire transaction. This is precisely where one of the most common mistakes made by prospective buyers arises: calculating their budget based solely on the deposit and forgetting about the remaining costs. The down payment: why is 20% so common? Financial institutions assess every mortgage application individually. Having a particular income does not guarantee that we will be able to borrow a specific amount, as the bank will consider our ability to repay the loan, employment stability, level of indebtedness, age, assets and other financial commitments. The property we intend to buy will also be assessed. The valuation is particularly important because it establishes the property’s value for mortgage lending purposes. The Bank of Spain reminds buyers that the property must be valued before the mortgage is formally granted and that the final lending decision depends on both this valuation and the borrower’s ability to repay. As a general practice, mortgage financing stands at around 80%, which is why the remaining 20% is commonly referred to as the deposit that the buyer must contribute. However, we should approach this calculation with caution. If we find a property priced at €500,000 and obtain financing equivalent to 80%, we might assume that contributing €100,000 plus the associated costs will be enough. In reality, the amount the bank agrees to lend will depend on its assessment of our application and the property’s valuation. For this reason, we recommend assessing the available financing before committing a significant amount towards a reservation fee or arras deposit, particularly when the purchase depends on obtaining a mortgage. This is also the right time to understand the steps involved in buying a property, from legal and Land Registry checks to the mortgage, title deed and applicable taxes. Understanding the entire process before making an offer helps us establish how much capital we need to keep available and prevents us from using all our savings simply to cover the purchase price. Taxes change how much you need to save The answer to how much you need to save to buy a property can vary considerably depending on whether you are purchasing a new build or a second-hand property. How much should you save to buy a second-hand property in Andalusia? Second-hand properties are not subject to VAT. Instead, the transaction is generally subject to Property Transfer Tax (ITP). In Andalusia, the standard ITP rate for property purchases is currently 7%. This means that a second-hand property valued at €300,000 would incur an ITP bill of €21,000, based solely on the standard rate and using a simplified example. If we also need to contribute €60,000 because we are obtaining 80% mortgage financing, we would already need €81,000 to cover the buyer’s contribution and ITP, before taking any other transaction costs into account. For a €500,000 property, the initial calculation would be €100,000 for the 20% not covered by the mortgage and €35,000 in ITP at the standard rate. This brings the total to €135,000, still excluding other expenses. These examples demonstrate why it is important not to confuse the mortgage deposit with the total

Buying a property is one of the most important decisions we make in our lives. Whether you are looking for a home or an investment, it is natural to wonder when the best time to buy a property might be. However, the answer depends on more than movements in the property market: personal circumstances, finances and the wider economy also play a part. On the Costa del Sol, where Spanish and international demand continues to grow thanks to the region’s climate, quality of life and future prospects, identifying the right time can make a considerable difference to both the purchase price and investment returns. At RH Privé Estates, we support our clients throughout the buying process, helping them make decisions with confidence, transparency and a long-term perspective. Is there really a best time to buy a property? One common belief is that it is always worth waiting for prices to fall. In practice, predicting when the market will reach its lowest point is extremely difficult. The best time to buy a property is often when your personal and financial circumstances allow you to do so comfortably. Constantly trying to anticipate market fluctuations can mean missing out on attractive opportunities. In established markets with strong demand, including certain areas of the Costa del Sol, quality homes also retain their appeal during periods of economic uncertainty. Personal circumstances that suggest you are ready to buy Beyond the wider economic picture, several personal factors can indicate that you are ready to purchase a home and help you determine the best time to buy a property. Job stability is one of the most important. A reliable income makes it easier to obtain financing and meet mortgage repayments with greater confidence. It is also advisable to have enough savings to cover the deposit, taxes and other purchase costs. Careful financial planning helps prevent overstretching your budget and provides reassurance throughout the process. How long you intend to own the property is another key consideration. If you plan to live in the property for several years, small market fluctuations become less significant compared with the value the home may provide over time. How does the property market influence your decision? Although personal circumstances are central to the decision, it is also worth examining market conditions. When housing supply is limited and demand continues to grow, as is the case in many prime locations on the Costa del Sol, prices often remain stable or follow an upward trend. In this context, delaying a purchase in the hope of a significant price reduction could mean paying more for the same property a few months later. At certain stages of the market, new-build developments may also become available at particularly competitive launch prices. Buying during these early stages can offer an attractive opportunity for medium-term capital growth, which may influence your decision about the best time to buy a property. The role of interest rates The true cost of buying a home depends on more than the asking price. The cost of financing is also a major factor. When interest rates are low, mortgage repayments tend to be more affordable, giving buyers access to more favourable financing terms. However, even when rates are higher, it may still be a good time to buy if you find the right property, negotiate suitable terms and seek professional advice. Waiting for a possible reduction in interest rates can sometimes coincide with an increase in property prices that offsets, or even exceeds, any savings on financing. Buying off-plan or turnkey: timing matters here too The right time to buy also depends on the type of property you are looking for. Off-plan developments allow buyers to spread payments throughout construction and, in many cases, secure more competitive initial prices. They also offer opportunities to personalise selected finishes and features to suit the buyer’s preferences. RH Privé Estates offers dedicated personalisation programmes for its new-build developments, helping buyers create truly individual homes. A turnkey property, meanwhile, is ideal when you need to move in immediately or want to start generating rental income as soon as possible. Neither option is inherently better; each meets different needs. Is it worth waiting for property prices to fall? This is one of the most frequently asked questions, and also one of the hardest to answer. Nobody can guarantee how the property market will perform over the coming months or years. What we do know is that well-built homes in established locations with consistent demand tend to retain their value better over the long term. In international markets such as the Costa del Sol, where buyers from numerous countries remain interested in purchasing property, demand often stays resilient even in challenging economic conditions. Finding the right home is therefore often more important than trying to identify the perfect moment. Rather than focusing exclusively on the best time to buy a property in market terms, it is worth considering how well a particular home fits your needs and long-term plans. Costa del Sol: a property market with long-term prospects The Costa del Sol remains one of Europe’s most sought-after residential destinations. Its excellent climate, infrastructure, international connections, restaurants, golf courses, marinas and quality of life attract buyers looking for a permanent residence, a second home or a property investment. In this context, purchasing a home in an established location can be a strategic long-term decision, particularly when choosing developments built to high standards of quality, sustainability and innovation: values that form part of RH Privé’s philosophy. The importance of professional advice Buying a property involves assessing legal, financial, planning and technical considerations. Working with a specialist team helps reduce risks and supports decisions based on objective information. At RH Privé Estates, we provide comprehensive support throughout the purchase process. Our team advises Spanish and international clients in several languages, offering access to exclusive developments and personalised service built on trust, transparency and experience. Buyers of new-build properties can also benefit from exclusive services, including legal advice, personalisation programmes and dedicated support before and