As a foreigner looking to invest in Malta’s real estate market, it’s essential to know your financing options. The good news is that there are several avenues available to help you fund your property purchase. Here’s a breakdown of the most common financing options for foreigners buying property in Malta:
Bank Loans and Mortgages
- Local banks: Several Maltese banks offer mortgage loans to foreigners, including Bank of Valletta, HSBC Malta, and APS Bank. These banks typically provide up to 70-80% of the property value, with repayment terms ranging from 15 to 40 years.
- Home country banks: Depending on your country of origin, some banks may provide international mortgages for purchasing property in Malta. Check with your local banks to see if they offer this service.
- Loan eligibility: Each bank has its criteria for determining eligibility. These may include income, credit history, and age, among other factors. It’s essential to consult with your chosen bank to understand their specific requirements.
Requirements for Obtaining a Mortgage in Malta
- AIP permit: If the property you intend to purchase is outside a Special Designated Area (SDA), you’ll need an Acquisition of Immovable Property (AIP) permit from the Maltese government.
- Bank documents: Banks require various documents, including proof of income, bank statements, and identification, to assess your creditworthiness.
- Property-related documents: You’ll need to provide the bank with a copy of the preliminary agreement, property plans, and any other relevant documentation.
Interest Rates and Fees
- Interest rates: The interest rates for mortgages in Malta can be variable or fixed. Variable rates are typically tied to the European Central Bank’s base rate, while fixed rates are set for a specific period (usually 3 to 5 years).
- Application fees: Banks may charge an application fee for processing your mortgage application. This fee can vary depending on the bank and the size of the loan.
- Legal and notary fees: When purchasing property in Malta, you’ll need to cover legal and notary fees, which are usually around 1-2% of the property value.
By exploring these financing options and understanding the requirements, you’ll be well-prepared to secure funding for your property investment in Malta. Remember to consult with your chosen bank or financial institution for specific details and advice tailored to your unique circumstances. Happy property hunting!