Our Austrian Mortgage advisor is Gerald
He has many years experience in the financial services field in Austria. He speaks English, so you can be assured that your requests are dealt with in either German or English
Can I get a Mortgage for Austrian property?
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!!For mortgages, in Austria, this has translated as:
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%.
This requirement for an income in Austria, 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!
What can one do?: There are still Austria mortgages available, it is just that the criteria to get them has become more stringent. The other option is to borrow against an existing UK property to make a purchase...particularly for the cheaper properties in Austria.
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 and they get free holidays!
You can get a quote more or less immediately, but to have a firm fixed mortgage offer you would need to complete a few forms and supply, copy of passport, P60 to confirm income or if self employed accountants confirmation of income. This is understandable.
The interest rates are around 2.% as at Jan 2016 and a 20 year term is typical. But you can get up to 30 year term. At times some of the local banks have promotions, offering mortgages at a special introductory rate....sometimes as low as 1.75 % for the first year.
It is usual for the Austrian Banks to send one of their managers or mortgage advisors to do a valuation, this is free of charge. From this valuation they will offer up to 60% of the value.
There is a set up fee for a mortgage and this tends to be 2% of the loan value. Unlike UK banks the cost is not hidden in the interest rate, but set out on your mortgage offer. Be aware then that when it comes to the amount of mortgage transferred to the Notar for you, the fees and tax on the mortgage will have been deducted..typically a 100,000 mortgage will have bank costs of around 3,500 euros.
Some Banks are also able to offer the first year with no monthly payments and you just pay the interest due on the loan amount each quarter.
Gerald is the Experienced Austrian Mortgage & Financial Advisor on our team, who can advise you about Mortgages in Austria. He will be able to get you a few offers to choose from, which keeps the choice in your hands and you are not getting sold a mortgage that is unsuitable for your needs.
We are here to help make your purchase in Austria as simple as possible. Please email us if you would like to know more. firstname.lastname@example.org