Maximum Mortgages: What They Are and What They're For 2026

For several years, the maximum mortgage is a little-known option, but very useful in several specific contexts. This is because, for many Spanish families, the best way to buy their own home is through a housing loan.

If you're looking for financial flexibility to fund the purchase and improvement of your home, this type of mortgage could be just what you need. Below, we'll explain in detail what they are, what they're used for, and how you can access this versatile credit tool. Let's get started!

What is a maximum mortgage?

A maximum mortgage is a mortgage that not only finances the acquisition of a property. It also includes an additional amount for renovations or even to cover other expenses, provided they are linked to the property.

While a standard mortgage only covers the price of the property, a maximum mortgage allows you to request an extra percentage of its value. For example, if your home is valued at €200,000, you could ask for an additional 10% to 30% depending on the bank's policies.

What are they used for?

As you may have noticed, these mortgages have very specific applications within the real estate market. Primarily, they are ideal for buyers who not only need to purchase a home but also wish to cover other expenses related to its improvement. Some of their main uses include:

• Renovations or improvements. From remodeling a kitchen to improving energy efficiency, a maximum mortgage prevents you from having to resort to other more expensive loans.
• Home expansion. If you plan to add a room, build an extra floor, or undertake any significant expansion, this loan allows you to finance it without issues.
• Purchase-related expenses. Costs such as liens, registrations, and notary fees can be difficult to manage without resorting to additional credit. A maximum mortgage helps you include them in the total loan amount in a single transaction.
• Backing credit lines. Businesses or individuals can use them as collateral to access a bank credit line.
• Guaranteeing future obligations. If an individual or company has agreements with financial institutions that involve future disbursements, this tool acts as security for both parties.

You may also be interested in: property tax.

How is a maximum mortgage executed?

Executing a maximum mortgage is a process very similar to that of a traditional loan, though with some key differences. Below, we detail the basic steps to execute this type of mortgage:

1. Application and assessment

The first thing you should do to apply for one of these loans is to request a maximum mortgagefrom your lender. The entity will conduct a property evaluation and determine if it is feasible to grant you a loan for a percentage higher than the purchase value.

2. Assessment of renovation or additional expenses

The bank not only considers the value of the home but also the other expenses you will cover with the extra money. For this, in many cases, you will need to present a detailed budget of the renovations or improvements you plan to carry out.

3. Loan approval

If everything is in order and the bank considers the operation viable, it will approve your application within a few days. The granted loan can include both the value of the property and the other expenses you plan to cover with the extra money approved in the transaction.

4. Contract signing

Once approved, the next thing you should do is proceed with the contract signing. This document details the total loan amount and all agreed-upon conditions for the mortgage repayment.

5. Use of funds

Unlike conventional loans, the funds are not disbursed automatically. Instead, the applicant can use them as needed (as in the case of a line of credit).

Advantages of the floating mortgage

A maximum mortgage offers several advantages that can make it attractive in certain situations for specific buyers. Although its benefits are very extensive, we can say that the main ones are:

Greater financial flexibility

These mortgages allow you to access and use an additional amount of money as needed, without committing to a fixed amount from the outset. This flexibility is also useful for those who wish to adapt their home from the start, avoiding living with future renovations or postponing essential improvements.

Payment consolidation

With a maximum mortgage, all extra costs and expenses are consolidated into a single financial product. This simplifies payment management, eliminating the tedious process of coordinating multiple debts or credit lines.

More favorable terms

Maximum mortgages offer lower rates and longer amortization periods compared to personal loans or lines of credit. This is because they are backed by the property as collateral.

Taking Advantage of Real Estate Opportunities

Often, these loans allow buyers to take advantage of opportunities that might be inaccessible with traditional credit. For example, investing in properties that, after renovation, can significantly increase their market value.

Differences between a standard mortgage and a maximum mortgage

If you've made it this far, you likely already have an idea of the main differences between both types of mortgages. Even so, we'll explain them in more detail below so you have no doubts.

Scope of Financing

In a conventional loan, the bank only finances the nominal price of the home, limiting the credit to the cost of the property. Meanwhile, a maximum mortgage allows the buyer to request an additional amount beyond the property's value to cover purchase-related expenses.

Use of Additional Funds

A standard mortgage does not grant additional money beyond the property's value, whereas a maximum mortgage does.

Financial Flexibility

A mortgage is designed exclusively for the acquisition of the property, whereas a maximum mortgage addresses other needs without resorting to other financial products.

What is the maximum amount a house can be mortgaged for?

While this figure depends on the financial institution, banks generally offer between 10% to 30% of the property's value. Remember that even if the bank offers a higher percentage, the extra funds can only be used for the acquisition or improvement of the property.

Examples of a maximum mortgage

Let's say a young family buys a house for €180,000 but needs an additional €20,000 to renovate the kitchen and improve thermal insulation. With a maximum mortgage of 115%, they would receive €207,000, which covers both the property price, renovations, and additional expenses.

Are there other alternatives to maximum mortgages?

Yes, there are. Currently, there are various financial tools available to suit any need, including the following.

Personal loans

If you only need money for renovations and don't want to increase your mortgage amount, you could opt for a personal loan.

Home equity lines of credit

This type of tool allows you to access additional funds based on your home's value, but with more flexible terms.

Purchase and renovation loans

Some banks offer combined products that allow financing both the home purchase and renovations separately, but within a single process.

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Conclusion

A maximum mortgage is an interesting option for those seeking financial flexibility and wishing to cover more than just the cost of the home. Although they require detailed analysis and careful planning, their benefits make them an attractive option for buyers with specific financial needs.

If you're thinking of buying a home and undertaking renovations, one of these mortgages could be the perfect solution for you. Before making a decision, consult with an advisor at Domoblock to ensure this option is the most suitable for your financial situation.