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Home Loans

A smart idea is to check with a preferred bank what your disposable income will allow to borrow. Then start looking for a property within that range. A preliminary agreement subject to bank loan is drawn up between the owner, buyer, real estate agency (if applicable) in the presence of a notary. The procedure to obtain a home loan in Malta or Gozo is fairly similar across all banks on the Maltese islands.

Residents can obtain flexible loans that can provide up to 90% of the purchase price, with repayments spread out over 40 years at very competitive interest rates. If you are purchasing a home with your partner or spouse the bank will take into consideration both individuals' disposable income.

For non-residents, loans can cover up to 80% of the property value, although this varies. In both cases, monthly repayments should not exceed 30% of gross income.

To apply for a home loan and for the banks to process the application efficiently, one is usually required to submit the following documents:

  • A recent pay slip and FS3 (Annual Employee Statement of Earnings reconciliation) as evidence of income
  • An architect’s estimate of the property valueAny building permits and plans
  • Records of any existing financial commitments, including credit card debt and any other loans
  • A photocopy of the applicant’s ID card
  • A copy of the preliminary agreement
  • If the person applying for a loan is not already an account holder with the bank, a character reference might also be necessary
  • A complete life insurance policy is required for any home loan, as is a building insurance policy

In the case of a non-resident’s application for a home loan, all of the above would be required as well as additional documentation depending on the circumstances of the individual application.

In turn, the banks offer home loans under the following terms:

  • Up to 90% of the purchase price or completion costs for residents, or 80% for non-residents.
  • Preferential interest rates especially for the first years and for high value loans.
  • Monthly repayments up to 30% of the gross income.
  • Flexible loan repayment terms of up to 40 years, or up until age 65.

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