Some Tenerife properties still have an outstanding mortgage at the time of death. If you inherit a property with a mortgage, you also inherit the financial obligation. Here’s how it works in simple terms.
You Inherit Both Assets and Debts
Spanish inheritance law does not separate assets from liabilities. If the deceased owed money on a mortgage, the heirs must decide whether to accept the inheritance and take over the loan, or refuse it entirely.
You Can Renegotiate the Mortgage
After inheritance, the bank may allow heirs to:
- Extend the mortgage term
- Change the interest rate
- Keep the same terms exactly as before
Approval depends on the bank’s internal policies and the heirs’ financial situation.
Selling a Property With a Mortgage
You can still sell a property with a mortgage. At completion, the mortgage is paid off from the sale proceeds, and the heirs receive the remaining balance.
If the mortgage is higher than the property value, legal advice is essential before proceeding.
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