There are three types of Housing Loans in Malta. Depending on which you qualify for you get to pay certain interest rate:
– Loan for primary residence. (Lowest interest rate, lowest administration and legal fees)
– Loan for second residence (which cannot be in the same region/area of Malta as the primary residence – that mainly applies for a region around Gzira, Sliema, St. Julians). In certain cases additional documentation and permits (i.e. AIP – Acquisition of Immovable Property Permit) would be needed for EU, non EU and Maltese Citizens who are not a permanent residents here.
– Buy-to-let loan – if you already have two residencies and buying a third, if your primary residence is in the same region/area as the newly purchased property that is considered as a business investment and business interest rates applies.
In some cases depending on income rate and other commitments (other loans), location of the property being purchased there might be no option to take a second residence loan and there one has to make “step-up” for a business type loan on buy-to-let. In this case rental income would have to be declared and taxes have to be payed. Each loan will cost more on administration and legal fees.
The focus here is on primary/permanent residence loans.
Housing loans in Malta are being issued to local residents. To qualify for housing loan/mortgage in Malta one must possess a minimum deposit of 10% of the property value (banks are financing 90% of the purchase price and completion costs). Home Loans are normally to be repaid within a maximum term of 40 years. Loan should be repaid by the time the older borrower (one of Joint Applicants) is 65 years of age.
Documents needed for a home/mortgage loan application:
– Identity card. The borrower must have Maltese Resident ID: Maltese Citizens should reside in Malta and present their Maltese ID card or Passport, expats must provide their Maltese Resident ID.
– Evidence of income (three months’ payslips and form FS3 if you are employed, or three income
tax returns if you are self-employed)
– Preliminary agreement or deed of purchase of property.
– Architect’s valuation on banks standard form. (You will normally be able to appoint your own architect but in certain cases the valuation will need to be done by an architect appointed by the Bank.)
– For Non EU Citizens Acquisition of Immovable Property Permit will be needed.
Property will have to be insured, a loan insurance will be needed too.
The loan amount depends on how many dependants there are in a borrowers family.
FOR CITIZENS OF MALTA
The citizens of Malta can apply for Housing Authority Repayment Assistance Scheme.
In order to qualify under this scheme clients should:
– Be over 18 years of age
– be gainfully employed
– work permanently
– not possess another residential unit.
More information could be found at Housing Authority.
Citizens of all EU member states, including therefore Maltese Citizens, who have not resided continuously in Malta for a minimum period of five years may only purchase their primary residence or any immovable property required for their business activities or supply of services without the necessity of obtaining a permit under Chapter 246 of the Laws of Malta.
Individuals who are not citizens of a EU Member state may not acquire any immovable property unless they are granted a permit in terms of Chapter 246 of the Laws of Malta. More information could be found on The Office of Commissioner For Revenue.
Home loan providers: