Portfolio-backed property financing in Spain, explained

What it is

Portfolio-backed property financing, sometimes known as Lombard or securities-backed lending, uses an eligible investment portfolio as collateral for a loan. The portfolio can remain invested while the loan provides liquidity for the purchase.

Why buyers consider it

• The portfolio can stay invested rather than being sold
• It can sometimes be faster and involve less property-specific paperwork than a mortgage
• Facilities are often interest-only rather than capital-and-interest
• It can be combined with a traditional mortgage in a hybrid structure

The risks

• Interest still applies, and rates are typically variable
• Approval is case-by-case and lending values depend on asset composition
• If collateral value falls, the lender may require additional collateral (a margin call)
• In adverse markets, forced repayment or asset sales may occur
• Currency risk applies if the loan and portfolio are in different currencies

Leverage should be used conservatively, with a meaningful collateral buffer. Tax and legal advice should be obtained separately.

Financing examples are illustrative and do not constitute an offer of credit. Availability depends on the client profile, collateral, property, jurisdiction and lender approval.

General information only, not legal, tax or investment advice. Rules and rates change; confirm with independent professionals.