Selling €33,000 in stocks to fund a Spanish home down payment

Sell the portfolio for a down payment: good idea?

Is it worth liquidating a €33,000 portfolio generating €1,400 in annual net dividends to pay the down payment on a €100,000 property? This is the core question in this case involving an indefinite contract worker in Extremadura, Spain. He earns €1,237 net monthly, pays €400 in rent, and holds a dividend-focused portfolio worth €33,000 yielding about €1,400 annually. With these figures, buying a home priced between €80,000 and €100,000 forces a choice between depleting assets or waiting.

His own calculation frames the issue: adding 12% for taxes, notary fees, and mortgage costs brings the real outlay to €112,000. The bank requires a 20% down payment (€22,400), plus €4,000–€5,000 for furniture and painting. Offered mortgages have a TAE (Annual Equivalent Rate) of 4.7% with discounts or 5.1% without, resulting in monthly payments of €350 or €394. The uncomfortable conclusion: he would pay as much or more than current rent, lose €110 in monthly dividends, and add IBI (property tax), insurance, and community fees.

What the numbers say

Current savings are €200 monthly for investment and €50 for general savings, with a €5,000 emergency fund frozen for six months. His alternative plan redirects that €200 plus the €110 in dividends into a €350 monthly buffer, lasting until late 2025 or 2026 without touching the portfolio. This means waiting three to four years to avoid selling assets.

Proponents of buying now argue simply: rent is money gone forever. "Renting is wasting money if you don't plan to move for work," one view states. Opponents argue that depleting assets to buy is a mistake, especially when rent is contained and the portfolio generates income. A middle-ground option gaining traction is buying a small, cheap apartment: lower down payment, smaller mortgage, and a potential monthly payment below current rent.

The risk no one wants to face

Adverse scenarios appear in several analyses: special assessments on old buildings, job loss, or rent hikes breaking the balance. The common counterargument is that owning property shields against rising rents because mortgage payments stay fixed. However, critics note that a mortgage can also be a burden: with a modest salary, any unexpected expense weighs more with a 25-year loan than under a rental agreement.

Case updates after eighteen months show relevant changes: his gross salary rose to €25,000 (about €1,654 net monthly), exceeding expectations. With higher income and savings, the scale tips toward buying, but housing prices have also risen. The prevailing advice is to start searching now—without rushing but steadily—and not wait for a crisis whose timing remains unknown.

Ultimately, the decision remains unchanged: buying a home is a bet that rent will rise faster than mortgage costs. If right, you gain stability. If wrong, you hold an asset you can sell. A fine irony in a country where housing is both a refuge and a trap.