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🏛️ How mortgage financing really works in Andorra

Accessing mortgage financing in Andorra is certainly possible, but it operates under a logic very different from Spain, France, or most neighbouring jurisdictions.

Andorran banks are prudent, selective and fundamentally closer to private banking than retail banking. Some of the main criteria taken into account when assessing a mortgage application include:

• whether you are a resident or non-resident
• the type of property acquired (primary residence or secondary home)
• the stability and level of your income
• your available liquid assets
• your overall relationship with the bank
• your aggregate leverage
• the existence of collateral or assets in the country (companies, other properties, etc.)

This is the practical framework that shapes every mortgage decision in the Principality.

➤ If you wish to understand the distinction between becoming a resident in the country and becoming a tax resident, see the article Administrative residence and tax residence in Andorra: key differences.

💰 Financing percentages actually applied by banks

🏠 Primary residence: up to 80% (and exceptional cases at 90%)

In most mortgage operations, banks will finance up to 80% of the purchase price or the valuation — always applying the lower of the two.

Cases reaching 90% exist, but only with extraordinary guarantees or highly consolidated patrimonial profiles.

⚠️ Land purchases: treated differently

It is important to note that when acquiring land, banks generally do not provide financing.
Buyers intending to purchase a plot to build on will, in most cases, need to fund the entire purchase price themselves.

🏡 Second homes or investment properties: up to 60%

For properties that are not primary residences, the internal policy changes:

• general limit of 60%
• more extensive documentation
• stricter risk analysis
• less flexibility on interest rates

A larger initial capital contribution is usually necessary, often combined with additional guarantees.

📄 Deposit contracts (“arras”): why you must plan for at least 10%

The arras — the initial commitment payment made to secure a future purchase — typically represent:

• 10% of the property price at minimum
• 15% in many transactions in the current market
• in phased purchases (especially new developments), several instalments may be required, sometimes reaching 50%

Having this capital available is essential before engaging in discussions with any bank.

➤ To explore the risks involved, you may consult the article Buying property in Andorra: real risks and how to protect your investment.

📈 Interest rates: what you should realistically expect

🔧 Variable-rate mortgages: the predominant option

Most mortgages in Andorra are structured around Euribor + a differential.

Realistic differentials include:

• typical differentials: +1% to +1.5%
• excellent differentials: +0.5% (rare, requiring strong financial ties)

Banks assess, among other factors:

• employment or professional stability
• debt-to-income ratio
• income level
• available liquid assets
• tax residence in Andorra
• additional guarantees
• investment requirements in financial products

🔒 Fixed-rate mortgages: increasingly available but more expensive

Fixed-rate mortgages exist, yet:

• they commonly exceed 2%
• frequently reach or exceed 3%
• they depend significantly on the client’s overall profile

The Andorran mortgage market does not have the competitiveness of Spain or France. Rates adjust more slowly and banks maintain a lower appetite for risk.

⏳ Mortgage duration

While each situation differs, mortgage terms may extend up to 30 years.
However, this depends heavily on:

• the applicant’s age
• collateral provided
• stability of income flow

Among younger borrowers, 30-year terms are possible, though most mortgages fall between 10 and 25 years.

🏦 What truly defines Andorran banking

Andorra’s financial system remains deeply rooted in private banking, prioritising wealth management and long-term financial relationships. This results in:

• conservative approaches to mortgage lending
• a clear preference for solvent, stable clients
• personalised rather than mass-market operations
• potential linkage with investment products
• a preference for mixed structures combining lending with investments

For non-residents, this patrimonial linkage can be practically mandatory — often to a greater extent than initially expected.

💼 A conservative philosophy: lessons from the previous crisis

The memory of the 2007–2009 financial crisis continues to shape current decisions:

• reluctance to concentrate risk in real estate
• careful analysis of solvency
• preference for borrowers who contribute significant equity
• particular attention to liquid assets
• risk aversion linked to the existence of additional assets in the country (companies, properties, or bank-specific financial products)

The result: a more cautious but more stable lending environment.

🌍 Non-residents: significantly stricter criteria

For applicants who are not yet residents of Andorra, banks apply much stricter conditions:

• lower financing percentages (rarely exceeding 50–60%)
• difficulties verifying foreign income or accepting it as collateral
• reinforced AML/KYC requirements
• obligation to demonstrate sufficient liquid assets or income generation
• higher likelihood of investment requirements
• strong preference for high-net-worth profiles
• often, a near-obligation to channel income through the same bank

Becoming a resident fundamentally changes the assessment and the conditions available.

➤ If you are considering relocating, see the article Living in Andorra: the essential guide to obtaining residency and settling safely.

🏢 Which banks actually grant mortgages?

Although the financial system appears broad, in practice:

• there are only three banks in Andorra, which limits options
• foreign financing is highly restricted and complicated, especially due to the mandatory foreign investment authorisation. For more details, see the article Foreign investment authorization in Andorra: when it’s required and how to obtain it
• competition is limited, as demand significantly exceeds supply

This explains the relatively small differences between mortgage offers.

➤ To understand the system in detail, see the article Andorran banking system: local banks, financial regulation and international presence.

⚠️ Properties with special rights: the case of “cens enfitéutic”

Properties subject to cens enfitéutic — a widely used legal structure in Andorra — are not usually eligible for mortgage financing.
If this applies to you, working with an expert advisor is essential to evaluate alternatives.

🧩 How an Andorran bank assesses your case

Banks generally examine three core dimensions:

📌 Your overall relationship with the bank — and the country

Examples include:

• financial investments held with the institution
• insurance policies
• personal or business accounts. If you are considering creating a company, see the article Setting up a company in Andorra: steps, requirements and advantages
• assets under management

📌 Economic and legal stability

Objectively assessed elements include:

• employment contracts or other proof of income
• volume and recurrence of invoicing
• professional background

📌 Property viability

The property’s characteristics are equally relevant:

• type of property (chalet or flat)
• orientation, condition and altitude (ease of resale)
• price consistency with market value (valuation)
• risk of overvaluation (excessive exposure)

🗂️ Documentation and realistic timelines for mortgage approval

Banks typically request substantial documentation, including:

• income proof
• previous years’ tax returns
• bank statements from other institutions
• evidence of existing assets
• deposit contract (“arras”)
• detailed property information
• foreign investment authorisation (where applicable)

Typical timeframes:

• 1–3 weeks for residents or straightforward cases
• 4–8 weeks for non-residents or more complex applications

⚠️ Although it may seem counter-intuitive, banks do not guarantee mortgage approval until the intention to purchase is firm — usually once an arras contract or detailed property conditions are provided. Simulations are not common.

🧠 Critical coordination: mortgage + foreign investment approval

For foreign buyers, two elements must be carefully coordinated:

• foreign investment authorisation (if applicable)
• bank approval of the mortgage

Both are interdependent because:

• mortgage offers expire
• sellers rarely offer long extensions
• delays may result in losing both the property and the arras

➤ To understand this process, see Foreign investment authorization in Andorra: when it’s required and how to obtain it and Buying property in Andorra: real risks and how to protect your investment.

🏡 Public assistance for home purchases: can you benefit?

Due to the current situation of the Andorran property market, the Government has established a programme to support access to home ownership.

These measures do not apply to non-residents, nor to all residents, so eligibility is not guaranteed.

➤ To learn more, see the article First home access programme in Andorra: a new pathway to ownership.

🧭 Why an expert advisor truly makes the difference

The Andorran mortgage market is demanding, opaque, and highly personalised.
Not all offers are public, not all arras contracts are adequate, and banks are not always as clear as one might expect. An experienced advisor can help you:

• present your case in a way that banks genuinely value
• anticipate requirements and avoid friction
• negotiate better conditions
• prevent delays that could void an offer
• coordinate mortgage, authorisation and notary
• review and supervise contracts (particularly arras agreements) to avoid unnecessary risk

In Andorra, this coordination is often decisive. With substantial amounts at risk, it is not advisable to take unnecessary chances.

➤ To understand the Differences between managers, advisors and consultants: which one do you need?, we recommend reading our dedicated article.

📌 Conclusion: financing is possible — with foresight and sound judgement

Obtaining a mortgage in Andorra is entirely feasible, but it requires:

• understanding the reality of the country, the property market and the banking system.You can read Andorra’s property market (2019–2025): prices, new developments and housing access
• sufficient personal capital
• realistic expectations regarding percentages and loan amounts
• solid documentation
• a reliable track record that reassures the bank
• understanding of the conservative banking model
• accepting a financing structure that may be less attractive than in other countries
• navigating a more demanding and personalised process than in neighbouring jurisdictions

If you would like a rigorous analysis of your situation and a clear assessment of your real financing options, you may contact us through our form.

If you prefer a confidential and specialised meeting from the outset, you may book it at the bottom of this article or directly here.

In any case, it will be our pleasure to assist you in securing the property you aim to acquire.

Last review: November 2025