How mortgage on foreign real estate is issued for Russians in the most popular countries of Europe, Asia and America
Mortgages for overseas property are deservedly popular with Russians because of the opportunity to purchase comfortable housing in prestigious areas of various countries and favorable credit conditions. Let us consider in more detail the pros and cons of obtaining such a loan, the countries with the most advantageous offers and the existing requirements for non-residents.
On the pros and cons
Pros and cons of obtaining a mortgage loan for buying a home abroad is advisable in comparison with Russian conditions. The main advantages will be:
- low interest rates (4-5% per annum against our 9-10%);
- matching the price / quality of the property (you can find a lot of options for luxury apartments or a house on the beach with a price comparable to the price of a 1-room apartment in Moscow);
- the opportunity to invest personal money by buying liquid housing.
The disadvantages include:
- additional organizational, transportation and related costs when issuing a foreign mortgage (for the execution of various documents, translation into the language of the state, notarial services, consultations, commissions, etc.);
- possible tightening of requirements for foreign citizens (not every applicant can get a loan);
- credit conditions are not always transparent and understandable, since in some states floating rates may be applied, special conditions for early repayment of debt;
- an increased down payment (usually a non-resident will have to pay at least 30-40% of the value of the acquired property);
- careful control of money laundering (to minimize risks, the client will need to have a bank account through which legal operations and transfers are performed over a long period (1-2 years)).
Important! Before choosing a suitable mortgage option in a particular bank, it is recommended to correlate the above advantages and disadvantages of mortgage lending abroad, as well as carefully review the proposed conditions.
What do foreign banks look at when deciding
European, American and other foreign banks impose completely different requirements on borrowers when filing a mortgage application. It all depends on the legislation of the country, the credit policy of banks and the chosen mortgage program.
In a generalized form, foreign lenders pay attention to the following factors:
- Solvency of a potential borrower (official certificates, bank statements, documents confirming the ownership of movable and immovable property are accepted).
- The possibility of a lump sum to pay a substantial amount as a down payment on a mortgage (in some states it will be necessary to pay approximately 40-50% of the market price of the object being purchased).
- Presence of a valid account in a local bank (an account must be opened no later than 1-2 years before filing a loan application).
- The ability to collect and translate into the language of the state a complete package of documents.
- The presence of a positive credit history (the translated statement from the NBCH on the state of the client’s credit history is accepted).
Mortgage abroad for non-residents is associated with increased risks for the bank, so the level of verification of such a client will be maximum.
Where can I get a mortgage
For Russian citizens of the country, in which you can buy property with the help of borrowed funds, you can be divided into 2 groups: countries with the most favorable conditions and countries with a low probability of issuing a loan. Consider the conditions in more detail.
Countries with the best deals
The terms of lending to the most popular countries for obtaining foreign mortgages that are characterized by loyalty to foreign borrowers are given in the table below.
|A country||Interest rate||Settlement term with the bank||Down payment,% of the cost of housing||Special features|
|Spain||4 – 5% (when choosing a fixed percentage);2 – 3% (floating rate)||Up to 30 years||From 20||Foreigners are credited with leading banks in the country, offering conditions comparable in their benefits to those for the local population.|
|USA||From 5% per year||15 to 30 years old||Not less than 30||Make a mortgage to America can Russians who have a work visa or a green card with a stable income.|
|Germany||3 – 5% per annum||From 5 to 40 years||Not less than 40||The largest German banks lend on favorable terms and their citizens, and non-residents. The Russians will be able to take a loan in the amount of 50 thousand euros with a maturity of up to 40 years.|
|France||From 2.5% per year||From 5 to 20 years||From 30||The minimum amount of mortgage in France is 75 thousand euros. Both fixed and floating interest rates apply.|
|Turkey||Not less than 6% per annum||Up to 20 years||From 25||Mortgages in Turkey are issued by the largest banks in the country in Turkish liras, euros, US dollars and even rubles. The loyal attitude is applied to the Russians.|
These countries have increased attractiveness for our citizens in the matter of acquiring residential real estate due to low interest rates, prestige and the absence of strict requirements for customers.
Countries where it is difficult to get a mortgage
Here it is conditionally possible to distinguish between states in which it is difficult to arrange a mortgage loan, and states in which it is practically impossible to do so.
Below is a table with conditions for obtaining a mortgage in countries with strict requirements for clients-foreign nationals.
|A country||Interest rate||Settlement term with the bank||Down payment,% of the cost of housing||Special features|
|Czech||4 – 5% per year||5 – 30 years||From 30||A client with a long stay status in the country who has a high income and the ability to deposit at least 30% of the price of the purchased object into a bank account can apply for a loan for the purchase of Czech real estate.|
|Bulgaria||From 7 to 15% per annum||From 5 to 20 years||Not less than 30||Mortgages in Bulgaria are issued in local currency (Bulgarian Lev). Foreign borrowers have strict requirements. The greatest chance of getting a loan is a young professional working in a local company and receiving a high income.|
|Great Britain||4 – 6% per year||From 5 to 35 years (||From 30||Mortgages in the UK for Russians have a lot of restrictions regarding the maximum amount of the loan, the requirements and the package of documents. Banks prefer to work with Russian investors and clients with an English residence permit.|
|Australia||From 4,5||Up to 30 years||From 40||Mortgages in Australia are characterized by restrictions on the type of real estate acquired. Non-residents can buy a mortgage in new buildings, but in the secondary market this will be quite difficult. Also require a long working visa.|
Loans in Denmark, Switzerland, Belgium are also in demand among Russians, but their registration will be difficult.
Among the countries that are virtually inaccessible to Russian citizens in terms of obtaining a mortgage on housing can be noted:
Mortgage in Italy is issued with rates of 5% per annum and allows you to buy property in prestigious areas of the country. However, extremely strict requirements are imposed on Russian citizens: a valid bank account is required (on which permanent operations are performed for 2-3 years) and the availability of other real estate in the Eurozone.
Japan is a country with very high prices for residential real estate. The policy of banks here is aimed at stimulating mortgage lending for its citizens, not foreign ones. Therefore, mortgages in Japan are practically unavailable for Russians.
For foreigners, there are also serious requirements that make mortgage processing in China an extremely complex procedure.
Attention! As for lending in the friendly countries of the Near Abroad, namely mortgages in Armenia, Kyrgyzstan, Uzbekistan and other CIS countries, Russian borrowers here are extremely loyal and friendly. Mortgage in Belarus due to financial openness between countries is also easy to get.
How to apply for a mortgage on foreign real estate: a step-by-step instruction
Mortgage abroad for Russians has the following stages of registration:
- Search and selection of a residential property.
- Study programs in local banks and the choice of a specific mortgage product.
- Preparation of a package of documents (in many countries it will be necessary to translate each paper into a local language and notarize it).
- Submission of a mortgage application.
- Signing the contract of sale with the seller.
- Consideration of the bank statements and announcement of the final decision.
- Conclusion of a mortgage agreement with the bank and the customer’s down payment.
- Registration of the transaction.
- Bank transfer to the seller’s account.
The sequence of steps, in general, is similar to the stages of registration in Russian banks.
List of documents that is required
Each country and each bank has its own list of required documents. In summary, it includes:
- valid passport;
- certificate of income (at least for the last 1-2 years);
- bank account statement with a reflection of the movement of funds;
- a document confirming the right to stay in the country;
- extract from NBKI on credit history;
- application form for a mortgage;
- documents for purchased property.
This list can be either shortened or supplemented.
Is it possible to take a mortgage on foreign real estate in Russian banks and in what way
Mortgage on foreign real estate at the moment in Russian banks is possible only through their subsidiaries abroad or by submitting an application to a partner bank.
For example, the Russian Sberbank has subsidiaries in the Czech Republic, Turkey, France, Croatia, India, Kazakhstan, Switzerland, Hungary, Serbia, Germany, Slovenia, China. Filing through the Russian offices of mortgage applications of foreign real estate is impossible. Most likely, the client will be refused. Therefore, registration of a loan is possible only in these countries, in local offices.
In addition to Sberbank, VTB Bank (Austria, Georgia, Kazakhstan, Azerbaijan) has foreign representative offices and subsidiary banks. Submission of applications is also carried out only in foreign offices.
You can also consider the option of obtaining a mortgage on the security of their own homes. In this case, you can spend borrowed funds for any purpose without a report to the bank.
The advantages of such a loan are as follows:
- fixing currency risks (you take a loan in rubles and it will not matter to you how the currency of the country in which you decide to purchase real estate will behave);
- You can buy any property in any country (you are responsible for your property before the bank, so it doesn’t matter how and where you spend the borrowed funds, as long as you pay for the mortgage on time);
- a large number of banks (with a mortgage secured by real estate, a large number of different banks work, which will allow you to choose the best conditions and increase the chances for mortgage approval).
Mortgage lending in foreign countries in recent years has become very popular among Russians. Low interest rates, the possibility of buying comfortable and prestigious real estate and other favorable conditions of registration are the main factors in the demand for mortgages in different countries of the world: USA, Germany, Spain, Czech Republic, France, Turkey, etc.
You can learn more about how mortgages are made in Spain , the USA , the Czech Republic and Germany for the Russians.
We are waiting for your questions and we will be grateful for your evaluation of the post.
We remind you that you can ask a lawyer your question in a special form on the site. We will definitely help with the registration of a transaction on foreign real estate.