In many jurisdictions, non-residents cannot apply for a mortgage to secure the sale of a property. An advantage of the Cyprus housing market is that the current system allows for providing housing loans to non-Cyprus residents. According to recent figures, Cyprus has one of the highest percentages of approval rates for granting loans within Europe, more specifically to non-Cyprus residents.
Eltoma Property can assist both residents and non-residents with obtaining a mortgage for property or land in Cyprus, the application procedure with our associate banking partner, the largest lender in Cyprus.
A precondition for obtaining a mortgage in Cyprus is that the purchaser is required to present a down payment of approximately 20% - 60% of the total purchase price of the property. Depending upon the conditions of the relevant application, the credit rate can vary from 2.2% – 2.5% for individuals and 5.3% for investors and housing developers. For more information about buying property in Cyprus, read our detailed guide on How to Purchase a Property in Cyprus.
Time frame for Mortgage Applications
For the average mortgage application, bank approval procedures range from approximately 3 weeks to 1 month.
Loan Application & Approval Steps
An individual requesting a mortgage in Cyprus will need to supply the following documentation:
• Tangible evidence to show the applicants ability to repay the loan sustainably.
• A copy of the applicant’s current & valid passport.
• A Personal Financial Statement should be completed and signed by the applicant. The debt to income ratio must be no more than 30%.
• A bank credit reference if possible, as this demonstrates strong proof of credibility.
• The last 12 months bank statements from all valid bank accounts, i.e. current, savings or loan accounts. The bank is especially interested in the main account where salary or other income is transferred.
• A tax declaration form for the previous 3 financial years.
• The last 3 months’ pay-slip or recent employment contract.
• Proof of permanent address (a valid rental agreement or utility bill).
• The relevant title deeds need to be transferred from the previous owners or property developers.
• A building permit is required if you plan to change the structure of the property.
• Property Valuation Report (to be executed by the bank).
• A copy of the property’s title deed is presented to the Bank with written instructions to proceed with the valuation and the debiting of the property down payment as previously agreed.
• Customers must complete and sign the Loan Application along with a Personal Financial Statement. The two documents must be presented to the Bank together with the other documents mentioned above that will determine their repayment ability. Contact us for a copy of these forms.
• Eltoma Property will then set up a meeting in the final stages between the applicant and bank to discuss any further details and address any enquiries.
The loan will be secured as follows:
• If the property has a separate title deed, the mortgage will proceed as above. Applicants must have already been accepted by the Cyprus Government to purchase the property.
• If the property has no separate title deed, the process is somewhat longer. With the assignment of the Sales Contract and guarantee from the Seller accompanied by a Waiver for the issuance of the title deed.
• Assignment of an insurance policy for the amount & duration of the loan.
• Any personal guarantees (if applicable).
Bank Fees & Other Expenses
• Arrangement fees: 1% on the loan amount.
• Documentation fees: €75-€100 (based on the loan amount and type of applicant).
Once the loan is approved, applicants are required to sign the loan contracts in person via the bank. If abroad, the signing can also be arranged in the premises of a Cyprus or European Embassy, however this delays the procedure somewhat.
For any help with the above procedures contact us, Eltoma Property has local legal experts on hand to assist you with the entire mortgage application.