Is it possible for a foreigner to get a mortgage in Greece?
In Greece, it is quite difficult for foreigners, especially those who are not permanent residents or who do not have an income in Greece, to obtain a mortgage. Greek banks often consider these applications to be higher risk.
It is important to know that the conditions and requirements may differ depending on your nationality, your financial situation and the bank you choose. Greek banks, like financial institutions in other European countries, are cautious in their lending processes. They carefully assess the borrower’s creditworthiness before granting a loan.
European Union (EU) nationals generally have an easier time obtaining financing compared to non-EU residents. Greek banks are more inclined to give loans to those with a connection to the EU, as this makes it easier to verify financial and legal information.
If it is already difficult to get a loan at all, it will be almost impossible to get one without speaking the language or without someone who speaks it. The best thing to do is to use the services of a lawyer.
The steps to get a mortgage in Greece
1. Choose a bank or financial institution
Some Greek banks offer real estate loans to foreigners, including large banks such as Alpha Bank, Piraeus Bank or Eurobank. You may also want to consider international banks with a presence in Greece, which may offer services that are more suitable for non-residents.
2. Building your financial file
Greek banks require complete financial documentation before considering a loan. Here are some commonly required documents:
- Proof of income: payslips, tax returns, or any other document proving the stability and level of your income.
- Bank account: Bank statements for the last six months to assess your financial habits.
- Asset situation: details of your current assets, whether in Greece or abroad.
- Credit history: Although Greek banks cannot always access foreign credit systems, they will want a certificate proving that you have no unpaid debts.
3. The amount of the personal contribution
Greek banks usually require a personal contribution of at least 30 to 40% of the price of the property. This is a notable difference compared to some European countries where the contribution requested may be lower. Indeed, banks consider that a high deposit reduces the risks for them, especially with foreign borrowers.
4. Property Verification and Additional Fees
Before granting a loan, the bank will conduct an appraisal of the property you are considering buying. This includes a legal check (title deed) and a physical assessment of the condition and value of the property. These services may incur additional costs, which should be included in your budget.
Specific requirements for foreigners
1. Tax Identification Number (AFM)
Any foreigner wishing to buy a property or take out a loan in Greece must obtain a AFM (Arithmos Forologikou Mitroou), which is a Greek tax identification number. This can be done through the Greek tax authorities or through a local lawyer.
2. Greek bank account
Most banks will require you to open a bank account in Greece to facilitate monthly payments and other loan-related transactions. A local bank account is also required for the disbursement of the loan funds.
3. Guarantee and insurance
Banks usually apply for a mortgage on the property as collateral. It may also be necessary to take out home insurance that protects both the bank and the borrower in the event of a claim.
Tips to make it easier to get a loan
- Hire a local lawyer: Greek law can be complex, especially for non-residents. A lawyer specialising in Greek real estate law will be able to guide you through the legal process and ensure that the property you are buying is in order.
- Use a mortgage broker: A broker who is familiar with the Greek market can help you negotiate the best loan terms and understand the specifics of the market.
- Show a strong creditworthiness: Banks prefer borrowers with a stable financial situation. Make sure you gather all the necessary documents to prove the strength of your income and assets.
Alternatives to mortgages in Greece
If you are unable to get a mortgage in Greece or find the terms too restrictive, there are other options:
- Foreign bank financing: Some banks in your country of residence may offer mortgages for purchases abroad. This may be an option if you have good banking relationships in your country.
- Use of equity: Many foreign buyers choose to use personal savings to finance their purchase, avoiding the complications of obtaining a local loan.
- Partnership with an international financial institution: Some international financial institutions may offer loans for real estate purchases in several countries, including Greece. However, interest rates can be higher than local loans.
- Residency for Investment Programs: Greece offers a Golden Visa program that allows you to obtain a residence permit by investing in real estate. While this does not offer a direct financing solution, it could make some of the process easier.
- Proxy investing: Some people choose to go through family members or business partners who are resident or have income in Greece to facilitate the purchase.
Conclusion
With a good financing plan and professional support, it is possible to realize the dream of buying a second home or a property for retirement in this sunny country. Whether on a paradise island or in a more continental region, Greece offers an exceptional living environment for those who wish to invest in European real estate.
