When planning a real estate purchase, there is a substantial difference between perceived purchasing power and actual financial viability. In 2026, banks have refined their Risk Scoring models using advanced data analysis, practically eliminating the discretionary margin that once existed in local branches.
The answer to why a bank might deny a mortgage today is purely technical: the applicant’s profile does not fit the entity’s risk matrix.
To ensure the success of the operation, it is imperative to understand the five fundamental parameters that risk departments audit before approving any financing.
The 5 Pillars of Bank Risk Analysis
Failure to meet any of these criteria automatically triggers insolvency alerts in banking systems.
1. Debt-to-Income Ratio (Repayment Capacity) This is the most critical financial indicator. Banking prudence regulations establish that the mortgage installment, added to pre-existing financial obligations (personal loans, car financing, credit cards), must not exceed 30% or 35% of the household’s net monthly income.
- Implication: If net income is €3,000 and there are already payment commitments worth €400, the maximum borrowing capacity for the new home is drastically reduced, regardless of available savings.
2. Job Stability and Continuity In the current context, having a permanent contract (contrato indefinido) is a necessary condition, but not sufficient. Entities analyze the entire employment history seeking continuity.
- The Criterion: Recent job changes (even with a salary increase), uncompleted probation periods, or self-employment with less than two years of consolidated fiscal track record are severely penalized in risk scoring.
3. Credit History and CIRBE The Bank of Spain’s Risk Information Center (CIRBE) is the applicant’s financial footprint. The bank verifies not only the absence of defaults but also global debt behavior.
- Critical Factor: A “clean” record is non-negotiable. Likewise, excessive use of revolving credit cards or the accumulation of micro-loans, even if payments are up to date, indicate a disorderly consumer profile that entities prefer to avoid.
4. Loan-to-Value (LTV) and Down Payment Except for premium solvency profiles or civil servants, the financing standard in 2026 remains at 80% of the appraisal or purchase value (whichever is lower).
- The Reality: The operation is unfeasible if the applicant does not have their own funds to cover the remaining 20% plus an additional 10-12% for formalization costs and taxes (ITP, Notary, Registry). Requesting external financing to cover this down payment is a direct cause for denial.
5. The Age – Amortization Term Binomial Risk policy limits the loan end date. Generally, the age of the youngest holder plus the mortgage term cannot exceed 75 years.
- The Impact: A 50-year-old applicant will see their amortization term limited to a maximum of 25 years. Shortening the term increases the monthly installment, which negatively impacts the Debt-to-Income Ratio mentioned in the first point.
Financial Preparation Strategy
As a wealth advisor, my recommendation is to approach the mortgage application with the same rigor as a business audit. To maximize approval probabilities, I suggest:
- Cleaning up CIRBE: Months before the application, it is strategic to cancel minor loans or credit cards. Reducing the previous financial burden directly increases borrowing capacity for the home.
- Job Consolidation: It is inadvisable to make professional changes during the home search process. Seniority is an asset that the bank values.
- Documentary Transparency: Any attempt to hide information is detected by data cross-referencing systems. Honesty and the orderly presentation of documentation (Tax returns, payslips, bank statements) predispose the risk analyst positively.
At Hernán Bustos – Real Estate Experts, we do not just manage real estate assets; we structure the operation from the beginning so that financial viability is guaranteed before signing the deposit contract.
Hernán Bustos CEO Hernán Bustos – Real Estate Experts
