One of the biggest mistakes you can make before moving to Malta is not checking the criteria for granting a mortgage from the bank. Many foreign nationals end up frustrated when looking to make a home because they have not checked how much they can borrow against their disposable income. The house they have set their hearts on could suddenly be out of reach.
There are plenty of banks to get a mortgage from in Malta. The procedure is very similar to all of them, too. It is vital to get an overview of your options before making a move to the island country.
Mortgages in Malta
On the one hand, if you are a resident of Malta, banks will prove flexible mortgages for up to 90% of the property’s price. You may make repayments over a period of up to 40 years (up to the age of 65), and interest rates are very competitive.
When assessing a mortgage application, banks will consider the disposable income of a single person and the joint income of a married couple or partners.
On the other hand, if you are not a resident of Malta, you can find mortgages that will cover 80% of the total property value. But decisions can be made on a case by case basis.
The monthly loan repayments are capped at 30% of gross income, regardless of residency or non-residency.
Requirements for getting a mortgage in Malta
When applying for a mortgage in Malta, you will need to provide the three preceding months’ payslips and the estimated value of the property, as estimated by a certified architect and any building permits required.
In terms of finance, you will need to submit documented evidence of any existing financial commitments you have. Include any credit card debt and information on any other loans you may have taken out.
You will also need to provide proof of identity and a copy of the initial promise of sale agreement. If you are not an account holder at the bank you are applying with, you will need a character reference.
When purchasing a property in Malta, life and building insurance are mandatory. These must be renewed every year for the duration of the mortgage. If you are a non-resident, you might need to provide additional documentation to the bank.
When you submit all the relevant paperwork and have estimated your income versus payment correctly, applications are usually processed quickly. The standard practice is to allow a minimum of three months from the promise of sale and subsequent application for a mortgage to the purchase date of the property.