On what conditions is mortgages issued in Europe in 2019: interest rate for Russians and locals

On what conditions is mortgages issued in Europe in 2019: interest rate for Russians and locals

European real estate is an effective way of investing both own and borrowed funds. Low interest rates, the optimal price-quality ratio of housing, flexible lending conditions – these are not all factors that encourage Russians to buy apartments, houses and apartments abroad. Let us consider in detail how mortgages are drawn up in Europe, what nuances and pitfalls exist.

Mortgage interest rate in EU countries

The list of European Union countries for 2019 includes 28 countries. A single economic zone, a healthy competitive environment, and all-pervading integration are not the basis for applying a common credit policy in existing banks and financial institutions. On the contrary, mortgage products offered to potential borrowers are characterized by a range of interest rates, customer requirements and a mechanism for registering transactions.

Below is a table with loan rates for mortgages in EU member states.

A countryInterest rate,% per year (average value)
Austria2.5 – 3.5
Bulgaria4.5 – 5
Great Britain2.5 – 3
Germany1.5 – 2
GreeceFrom 3.5
IrelandFrom 3.8
Spain2 – 3
Italy2.1 – 3
CyprusFrom 4
MaltaFrom 3.5
Poland3.7 – 4
SloveniaFrom 3.6
PortugalFrom 2.5
FranceFrom 2
Croatia5 – 6
Estonia2 – 2.5

The data on interest rates in European countries apply to residents. For foreign citizens will act completely different conditions.

Each country can set its own parameters of mortgage lending for the population, apply fixed, variable rates, requirements, commissions and fees.

Important! The value of the interest rate in the EU depends mostly on the Euribor indicator – the interbank lending rate in Europe. Since its value is prone to periodic fluctuations, the rates (especially floating) will change in the same direction as the Euribor.


Mortgage conditions in the TOP-5 countries with the lowest rates

In the table above, the top five EU countries with minimum mortgage rates include: Sweden, Finland, Germany, Luxembourg and Slovakia. The interest rate when you make a mortgage loan in them does not exceed 2% per year.

Conditions for obtaining a mortgage in Europe for each of these countries is given in the table below.

A countryInterest rate,% per yearAmount of borrowed fundsMaturityThe share of the down payment,% of the cost of purchased housing
Sweden1.85Up to 85% of the price of purchased living spaceUp to 50 yearsAt least 15
Finland1.47Up to 75% of the value of the acquired propertyUp to 30 yearsFrom 25
GermanyFrom 1.5Up to 80% of the price of the objectUp to 40 yearsNot less than 20
Luxembourg1.8Up to 30 yearsFrom 20
Slovakia1.8Up to 100% of the cost of housingFrom 0

The average loan term for the countries in question is 20 years. Obtaining a mortgage is not difficult, the main requirement is to confirm its solvency and reliable reputation, as well as compliance with the minimum requirements of the lender.

Interest rate in European countries not members of the EU

Western European countries that are not members of the EU include: Switzerland, Monaco, Liechtenstein, Andorra, Norway, Iceland, Bosnia and Herzegovina, Montenegro, Albania, Macedonia, Serbia.

The values ​​of interest rates on mortgages in them are presented below.

A countryInterest rate,% per year (average value)
SwitzerlandFrom 1,8
MonacoFrom 1.9
AndorraFrom 4,5
Norway6 – 8
IcelandFrom 1.5
Bosnia and HerzegovinaFrom 8
MacedoniaFrom 7.5
SerbiaFrom 4

The presented values ​​of mortgage rates are applicable when the average maturity of the debt to the bank is from 15 to 20 years for citizens of these countries.

Mortgage conditions in the top 5 countries with the lowest rates

Among the countries that are not part of the European Union, characterized by low lending rates on mortgage loans, can be noted Iceland, Switzerland, Monaco, Liechtenstein and Montenegro. Let us consider in more detail the conditions for obtaining a mortgage in them.

A countryLoan amountDebt repayment termThe share of the down payment,% of the cost of purchased housing
IcelandUp to 80% of the value of the acquired residential propertyUp to 40 yearsFrom 20
SwitzerlandUp to 90% of the price of housingUp to 50 years (even life mortgage applies)From 10
MonacoNot more than 80% of the value of the purchased objectUp to 15 yearsFrom 20
LiechtensteinUp to 90% of the price of living spaceUp to 20 yearsFrom 10
MontenegroUp to 80% of property valueNot more than 25 yearsFrom 20

Mortgages in Iceland can be issued only by a citizen of the country, as local legislation prohibits the sale of any real estate to non-residents. Loans are issued for a long term (up to 40 years). Mortgage conditions for its residents are extremely beneficial and are characterized by loyalty to borrowers.

In Switzerland, housing loans with a repayment period of up to 10-15 years are most popular, however, loans with a lifetime repayment period are also common. If the borrower does not have time to pay off the lender during his life, the burden of payments goes to the direct heirs.

Monaco is a country of “cheap mortgage” and “expensive real estate”. The minimum loan amount can not be less than 500 thousand euros. For mortgage transactions, both fixed and floating and combined interest rates are applied.

Mortgage in Liechtenstein is issued for a relatively short period (up to 20 years) with the obligatory payment of the initial payment in the amount of 10% of the market value of the purchased property.

Acquire housing with the help of borrowed money in Montenegro can be able-bodied, having the possibility of official confirmation of their income. The minimum size of the mortgage is 10 thousand euros, and the maximum – 500 thousand euros.

In most of the reviewed countries, citizens aged 20/21 to 65-75 years can apply for a mortgage loan. In addition to compliance with the age limit among the mandatory requirements for customers:

  • availability of an account opened with a local bank (with the movement of funds over the past few years);
  • purchase of insurance;
  • sufficient creditworthiness;
  • permanent employment;
  • provision of a complete set of documentation.

Where are the most favorable conditions for the Russians

Foreign citizens, including Russians, will be able to get a mortgage in Europe only if they comply with a number of requirements and under worse conditions than the local population.

Below is a table with data on the key parameters of mortgage registration in European countries that are characterized by the greatest benefit.

 A countryInterest rate,% per yearAmount of borrowed fundsMaturityThe share of the down payment,% of the cost of purchased housing
Great Britain4 – 6From 100 thousand pounds sterlingUp to 35 yearsFrom 30
Spain4 – 5From 50 thousand eurosUp to 30 yearsFrom 20
Germany3 – 5Up to 40 yearsFrom 40
FranceFrom 2.5Not less than 75 thousand eurosUp to 20 yearsFrom 30
Cyprus4.7 – 5Up to 40 yearsFrom 40
Portugal2.5 – 4From 5 thousand eurosUp to 35 yearsFrom 30
CzechFrom 4From 500 thousand Czech crownsUp to 30 years
SwitzerlandFrom 2Not less than 500 thousand Swiss francsUp to 15 yearsFrom 40
Austria2 – 4From 25 thousand eurosUp to 35 yearsNot less than 30
BulgariaFrom 7 to 15Up to 150 thousand eurosUp to 20 years

A logical conclusion can be made from the table that banks in Switzerland, France, Portugal and Austria are ready to offer the most favorable conditions for Russians to obtain mortgages. It is in the credit institutions of these countries that the minimum percentages (from 2 to 5) are valid, the values ​​of which are comparable to the terms of lending for the local population.

Quite simply, a Russian citizen can apply for a loan to buy real estate in France, Germany, Bulgaria and the Czech Republic. In other countries, non-residents are subjected to thorough analysis in order to minimize potential risks. Some banks require an extract from NBKI about the absence of a negative credit history, as well as other documents confirming the trustworthiness of the client.

Rates of 2-4% per annum are a symbolic payment for the purchase of comfortable housing in prestigious European areas. The final overpayment (how much mortgage lending will cost) can be discussed in advance with the bank manager.

Russian citizens will have to provide the bank with the required set of papers translated into local language and notarized. Requests of clients with sufficient solvency and stable employment in the territory of the state in which the mortgage is issued are approved.

Attention! In practice, it has been proven that European banks are more loyal to Russians, who have been working for a local company and receiving high incomes for at least 2-3 years (especially scientists, educators and healthcare workers).

Also in advance, you should include in your future expenses when you make a mortgage loan in a bank of Europe such additional costs as payment for the assessment of the acquired property, notary services, bank commission and other fees and charges.

Mortgages in Europe are characterized by economic benefits not only for local citizens, but also for non-residents, including Russians. When submitting a mortgage application to banks, one should take into account the objective fact of raising high demands on foreign nationals, since they represent a source of increased risk. The most favorable conditions for obtaining mortgages in Europe today can be obtained in such countries as Switzerland, France, Austria, Portugal and Germany (from 2 to 4% per annum with a maturity of up to 15-35 years).


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