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.
27th April 2021
Mortgages are getting even more difficult to obtain, and the latest round of regulations certainly does not help.
To qualify for an Austrian bank mortgage, your income must be in Euros and preferably taxed in Austria or EU.
This makes it difficult for overseas buyers, particularly the UK and USA.
Are there any answers?
Well, one could buy a holiday property cash, and this is probably ok for cheap properties under €100,000 but not everyone has available funds to do this. Many families buy a property together and in Austria, up to 4 people can be named on the ownership registration document.
We have found that clients are now moving towards cheaper properties and raising funds in their own countries using their home country property as security for loans. This is probably one of the best methods, particularly when one’s own currency has a higher against the Euro.
It is also easier if buying a property that has an existing income in Euros, such as an apartment house or guesthouse. The banks then are more helpful.
28th March 2021
The mortgage market for overseas buyers has not got any easier, but it remains possible to arrange a mortgage if the property has an income in euros.
2nd Oct 2020
We have successfully been able to arrange the first commercial mortgages from one of the forwarding thinking National banks. One of these was for an apartment house with 4 rental apartments bringing in a good yearly income. This was accepted by the bank as the Euro income required for them to issue a mortgage offer.
15th Sept 2020
Commercial mortgages are now available for Gmbh businesses. If buying an apartment house, guesthouse or hotel, that has an existing income, then it is possible to apply for a commercial mortgage.
22th August 2020
Business Mortgages for foreign citizens now possible.
Getting a mortgage in Austria has always been a problem for foreign nationals.
This financing option is based on a commercial mortgage and has many benefits, as it is more tax efficient. Our Notar can set up a limited company for a property buyer in his/her name. The limited company holds ownership of the property, but of course the buyer is able to use the property as he/she chooses.
This can be for own exclusive use, but is more tax efficient for holiday letting income or business use.
We have set up a special private information page, for our subscribers, to explain the process.
Please email us if you are interested and we can send you a password to access the page. firstname.lastname@example.org
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.
The way forward is with commercial mortgages,by setting upa company in Austria…notas difficult as one might imagine..
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.
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?