The government of the Republic has introduced a special policy to attract foreign capital. Under this program, non-residents can apply for a mortgage in Cyprus. To become eligible, a Russian, like another foreigner, does not even need to have a residence permit. Terms of mortgage in Cyprus are similar to programs in other countries but have specific characteristics. If you would like to purchase real estate here but do not have enough funds, we recommend you carefully read this article and get the assistance of experienced lawyers from P.L. Property Gallery Developers & Constructors Ltd.
Features of mortgage in Cyprus
To be eligible for a mortgage, you need to get the appropriate permission from the authorities of the Republic. This procedure may take up to 1 year but becomes a formality if the applicant for a mortgage in Cyprus does not have problems with the law in any state. You can get a mortgage even before getting permission from the authorities if you are assisted by the developer.
This provides two important advantages:
- If you purchase an unfinished construction project in Cyprus, you can get a deferred mortgage payment.
- The developer acts as a sort of guarantor for the Bank of Cyprus in mortgage issues. At the same time, the developer is interested in approving the mortgage to facilitate selling the property.
Russians, like other foreigners, can get up to 70% of the real estate cost on the mortgage in Cyprus. However, if you make a 50% advance payment, your chances of approval increase significantly.
Key conditions to get a mortgage in Cyprus
If you decide to purchase real estate in Cyprus on mortgage, it is important to learn the nuances of lending in the Republic in advance. This will help you objectively evaluate your chances and make a balanced decision.
The maximum mortgage for Russians ranges from EUR 300,000 to EUR 500,000. You get it mainly in Euro, the national currency of Cyprus, but sometimes in US dollars. Then the mortgage amount and the number of payments will be recalculated in an equivalent proportion.
Mortgage term in Cyprus
The mortgage can be provided for a period of 10 to 40 years. When calculating the mortgage term in Cyprus, much attention is paid to the borrower's age at the time of making the last payment. It shall not exceed 65 years of age. Early repayment is available. If a mortgage is provided in a small amount and for a short period, you can even avoid commissions for the early closing of the contract.
Those who purchase real estate in Cyprus are provided mortgages at a floating interest rate. The rate varies from 4.5% to 5%. Cyprus has recently tended to decrease mortgage interest for citizens of Russia and other countries.
Mortgage receivables in Cyprus
The amount of receivables shall not exceed 30% of the borrower's income. Mortgage receivables in Cyprus are paid both on a monthly and quarterly basis. The settlement plan depends on the mortgage amount and its term.
Cyprus banks offering mortgages to citizens of Russian and other countries examine the submitted documents and make a final decision on the application within 30-60 days.
If you decide to get a mortgage in Cyprus, you should keep in mind some additional expenses, such as stamp duty and payment for real estate valuation services. These expenses are covered by the borrower. However, a mortgage in Cyprus entails several other expenses. The bank will charge a 1% commission fee for granting the mortgage. Also, you will need to cover life and health insurance ranging from EUR 500 to EUR 1,800 per year and decreasing as the mortgage is paid down. You should also consider the costs of processing documents ranging from EUR 100 to EUR 150.
Documents to get a mortgage in Cyprus
Documents to apply for a mortgage for the real estate purchase by a Russian borrower are similar to those requested by banks in other countries.
To apply for a mortgage in Cyprus, you need to provide the following list of documents:
- Application form.
- Copies of valid national and international passports (for non-residents).
- Copy of the residence permit (for residents).
- Certificate of income for the last 3 months.
- Statement from the current bank account. If the borrower has no other loans in Cyprus and abroad, the reporting period is 6 months. Otherwise, it increases to one year.
- Real estate sales contract in Cyprus. It shall be signed and registered with the local Department of Lands and Surveys.
- Tax return for the last reporting period.
- Documents confirming title to real estate abroad (if any).
Submitting these documents, you will be able to confirm your identity and solvency to be approved for a mortgage in Cyprus. Keep in mind that the list of documents can be extended and modified depending on the status of the borrower. For example, banks in Cyprus sometimes request social insurance from entrepreneurs, if they apply for more than EUR 100,000, and legal entities have to submit entirely different documents.
How to purchase real estate in Cyprus on mortgage as soon as possible?
If you are interested in purchasing a house or apartment on the territory of the Republic, please contact the experts from P.L. Property Gallery Developers & Constructors Ltd. to speed up the process . Our company is the biggest developer in Cyprus and offers a wide range of real estate to meet any needs. We are ready to act as your guarantor for obtaining a mortgage, as well as provide legal assistance in resolving migration issues. Our experts will help you get a mortgage in Cyprus, guarantee financial security when purchasing your dream house or apartment, as well as provide recommendations on design solutions and further management of the property.