For Austrian property mortgages our property Professional is Gerald. He has many years experience in the financial services,home insurance and car cover in Austria. He can also help with registering a car for you.
He works with most Austrian Banks and financial institutions to get the best Austrian property mortgage offers for our clients.
He speaks English, so you can be assured that your requests are dealt with in either native German or English.
15th May 2020
It has been a long road, trying to circumvent different mortgage requirements for overseas buyers.
Gerald has been working closely with a new property finance company to open nup he mortgage market for clients not earning in euros.
To date he has 6 tranaction in the pipeline, These are for various types of properties and amounts to finance.
He hopes that in the next few weeks, it will become possible for overseas buyers.
These mortgages if arranged and financing is agreed, will have an admin fee of 250 euros.
14th February 2020:
Mortgages for Non EU citizens.
Many banks have been lobbying the EU financing industry, for years, to correct the imbalance between mortgages for EU citizens and overseas buyers with a different currency.
It appears now, that it will once again be possible for overseas buyers to obtain a Euro mortgage!
A new company has brought a different mortgage financing product to the property market, specialising in Overseas buyers. This will make it so much easier for Sterling, Dollar or certain other currencies.
We are getting further specific information shortly and will update this page with news updates.
Generally most banks are now insisting on a residency before considering a mortgage. They are also strictly enforcing the Euro income policy.
A residency can be secondary or it can be a business that is incorporated in Austria.
Many couples buying, decide to have one partner as resident in Austria and the other stays with own citizenship. But remember that the one with Austria residency will pay their taxes in Austria.
Mortgage legislation: on 21st March 16, a new ruling came into force that all income for an Austrian mortgage needed to be in Euros or if from another EU country also with Euro currency.
The mortgage rate fluctuates and at present is around 1.5% or lower, but so to be on the safe side we have given examples with 1.5% interest rate.
The figures are for guidance only and one should get an actual quote for their own circumstances.
Mortgage amount: 50000€ (70% of purchase price - maximum possible) based on 2.25 interest rate: 1,5% duration: 240 months monthly installment: 201€ register tax: 780€ fee (2%) 1000€ (included in monthly instalment) bank account cost. aprox: 80-100€ a year depends on bank
Mortgage amount: 75000€ (70% of purchase price - maximum possible) interest rate: 1,5% duration: 240 months monthly installment: 303€ register tax: 1170€ fee (2%) 1500€ (included in monthly instalment) bank account cost. aprox: 80-100€ a year depends on bank
Mortgage amount: 100,000€ (70% of purchase price - maximum possible) interest rate: 1,5% duration: 240 months monthly installment: 402€ register tax: 1560€ fee (2%) 2000€ (included in monthly instalment) bank account cost. aprox: 80-100€ a year depends on bank
New European rules and regulations are making obtaining a mortgage difficult.
The Basel 111 agreement is one of the main causes.
“Basel III” is a comprehensive set of reform measures in banking prudential regulation developed by the Banking Supervision to strengthen the regulation, supervision and risk management of the banking sector. These measures aim to:
So, we guess banks are holding onto more of their cash, to allow for rainy days!!
If the income for repayments to a mortgage is not available in Austria, and is from overseas, it causes a risk problem, and most banks will refuse a mortgage or offer a much smaller loan percentage %. But there are a few banks who will make a larger loan on property to UK citizens.
This requirement for an income in Austria or another European country using the Euro, leaves the buyer with the option of buying a property to rent for income. This income can then be used for commercial mortgage loan purposes. The downside is that commercial mortgages are more expensive and more hoops to jump through!
Alternatively perhaps your employer could pay part of your salary in Euros?
Our mortgage advisor works closely with many banks and an Austrian bank that will offer up to 70% mortgages but the criteria and form filling are extensive.
Here is a guide to their criteria:
-how much money do you need for a mortgage–the total sum to be borrowed.
-desired duration of the mortgage
-proof of own resources e.g savings with which you can show that you can pay the difference between the purchase price (including buying costs) and the mortgage.
-assets e.g.: -existing mortgage documents which show your monthly repayments
-purchase contract or land register of your property in UK
-fotos for your own property in U.K.
-Do you own other properties
-funds/stocks & shares
-rental contracts if existing to show income.
-what is the intention for buying this property (holiday use, renting, retirement?)
-personal data (name-adress-family status)
-Austria property data (excerpt of land register–Property details sheet and floorplan)
-passportcopy, this can be scanned and sent as PDF.
-income situation (confirmation of income e.g. P60–any personal loans- exisiting mortgages etc.
-curriculum vitae, a little information about you and your employment.
Also, to bear in mind is that any mortgage offer from a bank must be signed in Austria, gone are the days when you could sign at an Austrian embassy in the UK.
So, with this in mind consider that you will need to rent a car to get around when yhou go to sign.
What else can one do? a good option is to borrow against an existing UK property to make a purchase…particularly for the cheaper properties in Austria. This puts you in the position of cash buyer! So, with cash you are generally in a better negociating position.
If the property is an old one for renovation, then if bought outright, an Austrian bank would be happier to lend the funds for any renovation.
The other choice that buyers are making is to share a property purchase, with family members and friends. There can be up to 4 owners registered to a property in Austria, so this means each would have 25% investment in the property. If the property is rented for holidays, particularly a chalet house, then the income can be over 20,000 euros a year…so a good return on a family and friends investment plus they get free holidays!
Our mortgage advice service is free and you are under no obligations.
Rules and regulations for Austrian property mortgages, are always changing and we would always advise that you check current and up to date changes.
We are here to help make your purchase in Austria as simple as possible. Please email us if you would like to know more?