Provision of funds (provisión de fondos)
The provisión de fondos is the total amount of cash you need in the bank account before signing. It covers your down payment, taxes, and transaction costs. Banks advertise "mortgages from 2%." They don't mention the 60,000 euros you need before they'll let you sign.
The general rule
For a standard mortgage at 80% loan-to-value:
- 20% down payment (entrada) — the portion of the price the bank won't finance
- 10-12% for taxes and fees — ITP or IVA+AJD, notary, registry, gestoría, appraisal
Total: you need savings of approximately 30-32% of the property price. For a 200,000-euro property, that's about 60,000-64,000 euros.
What the provision of funds includes
The bank or its gestoría sends you a detailed breakdown before signing. It typically includes:
- ITP (resale property) or IVA + AJD (new-build)
- Notary fees for the purchase deed
- Property Registry fees
- Gestoría fees
- Appraisal (if you haven't already paid for it separately)
The gestoría always requests more than the actual costs. They'd rather over-collect and refund the surplus (which takes 2-3 months) than come up short. Your money, their cushion.
Watch out: ITP and the appraisal value
A real scenario that generates a lot of frustration: if the appraisal comes in significantly above the purchase price, the gestoría may calculate the ITP based on the appraisal value rather than the purchase price. Users have reported differences of 8,000 euros from this (appraisal at 364,000 euros vs. purchase price of 285,000 euros with ITP at 10%).
The rule varies by autonomous community, but in many regions ITP is paid on the higher of the cadastral reference value and the purchase price. If the gestoría charges you based on the appraisal value and that's not applicable, you can claim the difference back from the tax authority (Hacienda).
When must the money be in the account
The provision of funds is deposited in the mortgage bank's account before signing. You normally receive the breakdown a few days beforehand. The money should be there at least 2-3 business days before the signing date to allow the transfer to settle.
One buyer nearly missed their signing because they transferred the funds on a Thursday evening for a Tuesday signing — it arrived just in time. Transfer at least a week ahead.
The arras count toward the total
If you paid 20,000 euros in arras on a 200,000-euro property, on signing day the bank transfers the 160,000-euro loan plus your remaining 20,000 euros from the provision of funds to the seller. The arras you already paid are deducted from the total price.
100% financing: what you still need
If you qualify for 100% financing (via ICO state-backed guarantee, young buyer programs, or direct negotiation), you still need your own money for taxes and fees. The bank finances 100% of the purchase price but doesn't pay your taxes. "100%" sounds free. It isn't.
For a 200,000-euro property with a 100% mortgage:
- Down payment: 0 euros
- ITP (8%): 16,000 euros
- Notary, registry, gestoría fees: ~3,000-4,000 euros
- Appraisal: ~400 euros
- Total needed: ~20,000 euros
With the ICO mortgage (the state guarantees the 20% gap between the standard 80% and 100%), banks are now required to offer these to applicants with stable employment and sufficient income. In practice, users report that Bankinter and BBVA accept them, though with more paperwork. The conditions should be similar to a standard 80% mortgage.
90% financing
Some banks like BBVA finance 90% for first-time buyers with high incomes (above 4,000 euros net per month). They lend 80% of the appraised value or 90% of the purchase price, whichever is lower. In this case you need a 10% down payment plus taxes and fees.
Does the bank deduct from the loan?
No. The provision of funds is your own money, deposited separately. The bank lends a fixed amount (as stated in the FEIN) and that amount pays the seller. The mortgage's own costs (notary, registry for the mortgage deed) are paid by the bank, not from your loan. This is required by law since 2019.
Some buyers get confused when they see the bank "deducting" expenses from the loan amount in a breakdown. In reality, the mortgage deed costs are the bank's responsibility.
If you're short on cash
Options that buyers with limited savings have used:
- ICO state-backed guarantee to cover the gap from 80% to 100% financing
- Negotiate lower arras (5% or even a 2,500-euro holding deposit)
- Family help formalized as a private loan (before a notary or by filing modelo 600 with the tax authority to avoid gift tax issues)
- Skip the bank's insurance and save the difference
What's not recommended: taking out a personal loan for the down payment. The bank will see it in the CIRBE (central credit register) and it worsens your debt-to-income ratio. It may cause your mortgage to be rejected entirely. The bank wants you to arrive with clean money — saved, not borrowed.
Note: ITP percentages vary by autonomous community and ICO mortgage availability may change. This guide reflects real experiences reported in online mortgage communities, 2024-2026.