Getting a mortgage in Malta

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Mortgages in Malta

If you need finance to purchase a property in Malta, then mortgages.co.uk could help, we can give you access to a team of licensed credit brokers, who have over 20 years experience in this field. You could raise a repayment mortgage on the Maltese property you wish to buy, depending on your individual circumstances.

Based on the valuation or purchase price of your property (whichever is lower), you could take a loan for up to 90% (in Maltese Lira) or 80% (in other major currencies) of its value; for the purpose of purchasing, or re-mortgaging for home improvements. Commercial loans can also be taken out.

There is a minimum purchase price (on your new property) of; £40.000; however there is no maximum loan. The repayment period can be up to 30 years, and could be available to applicants up to the age of 65. Current interest rates as at January 2003 are from approx 5.25% Variable in Maltese Lira.

The following example is based upon a repayment mortgage in Maltese Lira.

N.B. the cost of a mortgage protection plan has not been added.

How much can I borrow & what proof of income is required?

There are no non-status/ self-certification mortgage facilities available in Malta, however renting out your property is permitted, therefore all loans need to be supported by a minimum of, proof of income. If you are employed, you will need to produce, your last three months payslips, P60/employers reference and your last 6 months Personal bank statements. If you are self-employed you will need copies of your Audited Accounts together with you last 12 months business, and 6 months personal bank statements.

The Lenders in Malta will not take into account any proposed rental income from the property that you wish to buy.

Your loan will be based on your personal (or joint) ‘net’ pay, and is calculated on an affordability basis. For you to be considered by the lenders in Malta you total out-goings must not exceed 35% of your net monthly income.

A simple example; If your total net monthly income is £1,000, your total out-goings must not exceed £350, you must have £650 per month to be put towards the mortgage repayments to be considered.

A guideline for purchasing a property in Malta:

• Ensure that you have full ownership of the property upon completion, and that the relevant documents are available for the lender.

• With newly constructed properties, ensure that you know the date that the property will be registered to you. The lender cannot lend on the security of the property until it has registered.
• Due to the Maltese legal and administrative system, there may be slight delays on securing your loan, despite the fact that all reasonable steps will be taken to avoid this. So be prepared.
• Make sure you have researched every possible cost that you may incur, whilst purchasing a property in Malta. Note, you may be charged by the government in addition to the lenders legal costs (the Lenders costs however are usually specified when the Lender offers you the mortgage).
• Unless you are very experienced in purchasing abroad, it is very important that you seek some sort of legal advice before signing the contract for a property or paying a deposit. The Lender will require a copy of these signed documents together with an application form, however you will be able to sign these documents ‘subject to mortgage finance’, once the contract is signed it is legally binding, so if you do not state this and the Lender does not wish to do business with you, this could be a huge problem
• Legal advice may be costly, so ensure that you receive a complete quote, incorporating all costs, before applying for a loan.
• A Maltese bank account will be required.
• It is advisable that a life assurance policy is set up on all mortgages.
• Properties in Malta can be purchased by an individual or in joint names.