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Applying for an Italian Mortgage A Guide for British Citizens
As British citizens look beyond their own shores for investment opportunities such as residential property in Europe, Italy, with its rich cultural heritage and picturesque landscapes, often emerges as a top choice. But how can a British citizen secure a mortgage in Italy? This guide will outline the ins and outs of the Italian mortgage system, so you can confidently achieve your Italian property aspirations with the help of an Italian avvocato (lawyer).
In this guide, we will discuss Italian real estate market in more detail, exploring how you can get an Italian mortgage as a foreign national and the requirements you need to meet when buying property in Italy, including the typical interest rates to be aware of. We will also discuss the mortgage application process and how our Italian real estate lawyers (avvocatos) can help.
Click on the links below to jump to that section:
How you can get mortgage approval as a foreign national
If you are not an Italian citizen, there are certain requirements you must meet when applying for a mortgage
More about the mortgage interest rate in Italy
How you can obtain an Italian mortgage
If you need help translating important documents, our Italian avvocatos can help
How our real estate lawyers can assist in the mortgage process
Can You Obtain a Mortgage in Italy as a Foreign National?
British citizens and other foreign nationals can indeed obtain a mortgage in Italy. However, there are some restrictions and considerations to note. While Italians apply for a mortgage for up to 80% of the property’s value, foreigner nationals may find Italian lenders are willing to offer only up to 60% of the property’s value, especially for non-residents. The duration of the mortgage usually spans from five to 30 years, and the borrower must not be over 75 years of age at the end of the mortgage term.
If you are purchasing property in Italy, you may also be wondering how to become an Italian citizen. You can find out more about obtaining Italian citizenship and becoming a resident in our previous guides.
What are the Requirements for Obtaining a Mortgage in Italy?
For British citizens aspiring to get a mortgage in Italy, the following are standard requirements, however there may be other requirements on a case by case basis:
- Proof of Income: A crucial criterion, your income will determine your mortgage eligibility. Lenders prefer steady incomes, so employment contracts, payslips, or tax returns are typically requested. You also need a bank account through which to make mortgage repayments.
- Initial Deposit: As mentioned, foreign nationals usually have to make a more substantial down payment, sometimes amounting to 40% of the property’s value.
- Valid Passport: Essential for identity verification.
- Codice Fiscale (Tax Code): A unique tax identification number for every individual in Italy. This can be obtained through the local tax office.
- Bank Statement: To demonstrate your financial stability when asking for a loan.
- Property Details: A comprehensive description of the property, its valuation, and details about the seller.
- Clean Credit History: Like any other mortgage application, a clean financial record boosts your eligibility.
- Proof of Address: Utility bills or any official document indicating your permanent address.
- Property Survey: Conducted by an expert to ensure the property's condition and value.
Taking these steps can be slightly unnerving, especially if you are new to the Italian real estate landscape. Acquiring advice from an Italian real estate lawyer (avvocato) can help make the process smoother and less stressful.
What are the Potential Mortgage Interest Rates in Italy?
Mortgage interest rates in Italy are subject to change based on economic conditions, as with most countries. There are primarily two types of interest rates to choose from:
- Fixed Rate: This remains constant throughout the duration of the mortgage. It provides certainty in monthly repayments but might be slightly higher than variable rates initially.
- Variable Rate: Tied to the Euribor (European Interbank Offered Rate) and adjusted periodically based on market conditions. It might offer initial savings but comes with fluctuation risks.
It's wise to consult with a financial advisor or bank representative to understand the current financial market rates in relation to the residential real estate sector and the best option for your situation.
How do I Apply for a Mortgage or Loan in Italy?
- Pre-application Research: Understand the property market, localities, and potential homes that you are interested in.
- Check your credit score.
- Engage a Mortgage Broker: While this is not mandatory, brokers familiar with the Italian property market can guide you and assist you in accessing better mortgage deals.
- Property Selection: Once selected a property purchase agreement (Compromesso) should be drafted. This outlines the sale price and terms.
- Document Collection: Gather all the necessary documents as listed previously.
- Submit Application: Apply to your chosen bank or financial institution with all required documents.
- Property Valuation: The bank will conduct a property survey to ensure the home is a good investment.
- Approval and Contract: Once approved, you'll be presented with a formal mortgage offer. Review the terms carefully.
- Finalise the Purchase: With the mortgage secured, you can finalise the property purchase, this is done in the presence of a notary.
As a non-Italian resident, taking these steps can be demanding, which is why seeking legal advice is important for anyone unfamiliar with Italian law. Contact our expert legal team today to see how you can successfully apply for an Italian mortgage.
Do You Need to Translate Documents for a Mortgage in Italy?
Yes, it is required that all official documents submitted for a mortgage application, which are not in Italian, must be translated. The translations should be done by a certified translator to ensure accuracy. Documents like bank statements, payslips, and any legal records must also be translated and notarized. It is also recommended that copies of both the original and translated documents are retained.
To help ensure that the translation of your documents is accurate, you should consult an Italian-speaking lawyer (avvocato) to avoid any legal pitfalls.
How Giambrone and Partners Can Help
While the process might seem discouraging at first glance, with proper preparation and guidance, securing an Italian mortgage as a British citizen is entirely achievable. Whether you’re looking to soak up the sun in an Italian villa or invest in a bustling city apartment, understanding the mortgage landscape is your first step to making that dream a reality.
Our expert Italian avvocatos have vast experience in Italian real estate, and can help guide you through the process and communicate with relevant parties to make the process smoother. You can book a consultation with our Italian legal team here.