Mortgage Greece Guide
Getting a Mortgage in Greece - Expat Guide
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Mortgage in Greece
Greece has emerged as a popular destination for private property purchases and immigration, particularly among pensioners from Western Europe seeking an affordable and tranquil lifestyle. The decline in the Greek real estate market following the recent economic crisis has further enhanced the feasibility and potential profitability of such opportunities.
Acquiring property in Greece not only offers a pathway to residence but also presents a convenient option for obtaining a residence permit. The government is actively leveraging this proposition to attract foreign investors to the Greek real estate market. By purchasing a property for a minimum of €250,000, individuals can secure a Golden Visa, granting them permanent residence in the country.
This guide aims to provide readers with essential insights into mortgage loans for foreigners and the process of acquiring private property in Greece.
Purchase of Greek Real Estate by Foreigners
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The Greek government imposes minimal restrictions on property purchases for EU residents and non-EU citizens. However, there are two key conditions for non-EU citizens to consider. Firstly, properties near military bases and national borders are off-limits. Secondly, in some cases, proof of connection to Greece and a formal intention to buy property may be required.
Typically, Greek banks are hesitant to provide mortgage loans, regardless of nationality. As a result, the majority of real estate purchases in Greece are made with cash. Nevertheless, securing a mortgage is still possible if you meet all the necessary terms and conditions.
Greek Real Estate Market
The prices of private properties in Greece exhibit significant variation. In Athens, for instance, apartments range from €70,000 to €400,000, while €200,000 can secure a decent house in Crete. If your intention is to invest in property, considering smaller islands like Santorini may prove to be a more lucrative option, as they offer higher potential yields.
Mortgage Terms and Rates in Greece
To for a mortgage, you must be at least 25 years old and you need to ensure that your loan is fully repaid by the age of 58. Once these criteria are met, it is necessary to open a bank account one of the many Greek banks and obtain a Greek tax number, known as AFM.
In Greece, the minimum loan amount is relatively low, starting from €10,000. The maximum loan amount depends on your disposible income, typically not exceeding 80% of the property price. Mortgage rates in Greece range from 3.5% to 7.5%, while the mortgage terms can vary from 6 to 30 years.
To obtain a mortgage in Greece, the following are required:
- A copy of your ID or passport.
- Your Greek Tax Number.
- A letter of employment or any documentation verifying your income.
- A utility bill or any other document that confirms your residential address.
- Proof of a registered telephone number.
It is important to note that all documents must be in Greek and notarized.
Mortgage Processing Costs in Greece
In addition to application and legal fees, there are certain property taxes that you will need to pay, with the ENFIA being the primary one.
Here are the typical rates for property taxes:
Real Estate value
When it comes to mortgage and purchase registration costs, you can anticipate them to account for approximately 10-15% of the transaction value. It’s worth noting that comparing exchange rates can lead to substantial savings, especially in Greece, where the rates tend to vary significantly.
Real Estate transfer tax
Property Registration fee
3.5% to 7.5%
Property Notary fees
Real Estate Agent fees (if applicable)
Before a mortgage lender approves our application and finances the purchase transaction, you will need to cover all of these costs.
Real Estate Purchase Financing Alternatives
If you find the mortgage rates in Greece to be excessively high, you may want to explore a few alternatives:
- Consider remortgaging your current property to purchase a property in Greece.
- Explore the option of finding a private lender, although it’s important to note that the interest rates may be exorbitant.
- Negotiate with the seller to secure special terms.
Regardless of the alternative you choose, ensure that you have a minimum of 10% of the property value available for a down payment.
Mortgage Registration Process in Greece
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The registration process itself is relatively straightforward and can be completed in a single visit to Greece. The purchase processing typically takes between one to three months from the date of registration.
Here are the steps involved:
- First, you’ll need to open an account with any Greek bank and apply for a tax number.
- Once you’ve chosen a property, you can reserve it by making a small upfront deposit. In general, a reservation fee of €5,000 should be sufficient to secure the property for a period of 2-4 weeks, depending on your agreement with the seller.
- Next, it’s important to hire a legal agent who will verify the property documentation of the seller as well as your mortgage registry. The lawyer’s fees will amount to approximately 1.5% of the transaction value, plus VAT.
- Make a down payment of 10% and sign a preliminary purchase contract, which will then need to be certified by a notary. The notary will charge a fee of 1.2% of the transaction value. Additionally, you’ll be required to pay a registration fee of approximately 0.5% to 0.75% of the transaction value.
- Finally, submit all the necessary documentation to the Registry of Mortgages and the Land Registry in order to obtain the property title.
By following these steps, you’ll be on your way to owning a property in Greece.
Mortgage Terms for Golden Visa Applicants
Under immigration laws, acquiring a property valued at a minimum of €250K is a prerequisite for applying for a Golden Visa. However, unlike other European Union countries, Greece permits visa applications even if the property was purchased with a mortgage loan that hasn’t been fully repaid yet.
Once you’ve confirmed with the Consulate or your lawyer that you meet the visa requirements and have a good chance of obtaining it, you can apply for a mortgage at any bank, including Greek ones. The terms offered by Greek banks in this scenario are generally comparable.
To begin the application process, you’ll need to gather all the necessary documents (refer to the documentation section) and, if required, apply for a Greek visa. If you bring along an interpreter or, better yet, a local attorney, it’s highly likely that you’ll be able to complete the procedure in a single day.
Keep in mind, however, that an annual income of at least 30K euros is a prerequisite for eligibility. Additionally, non-residents, particularly those from countries outside the European Union, might be asked for a higher down payment, which in some cases can amount to half of the total property value.
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Our experienced legal professionals in Greece ensure a seamless and transparent process for acquiring real estate and investment funds. Feel free to contact our knowledgeable team members for any inquiries or assistance you need. We’re here to support you every step of the way!
Foreigners’ Rights to Buy Property in Greece
As per Greek laws, anyone, regardless of nationality or residency, can purchase real estate in Greece, provided they meet all legal and financial requirements and the property is not in close proximity to the country’s borders or military bases. Following the recent economic crisis and a notable decline in the country’s property market, the Greek government has actively endeavored to attract foreign direct investments in this sector of its economy.
However, in certain cases, they may request a written explanation for your interest in acquiring property in Greece and any affiliations you may have with the country. Nationality becomes less significant when accompanied by a substantial income and a genuine intention to make a significant investment in the Greek economy.
Greek Property Acquisition Procedure
Purchasing flats in Greece is generally a straightforward process, requiring minimal time and effort compared to other European countries. As long as you gather the necessary documentation and enlist the support of a lawyer and interpreter, you’ll be well-prepared to embark on your property-buying journey. Here’s a simplified step-by-step guide:
- Explore the market to find a property that aligns with your preferences.
- Ensure you have all the required documentation in order.
- Apply for a tourist visa and arrange a visit to Greece.
- Find a lawyer who can also serve as an interpreter, streamlining the process.
- Open a bank account
- Apply to get a local tax number
- Make the necessary down payment.
- Fulfill the obligations of property transfer tax, registration, notary, agent, and legal fees.
- Apply to the Land Registry to acquire the property title, and get ready to relish your new home away from home.
With these steps, you’ll be well on your way to making your Greek property dreams a reality.
The Greek real estate market presents outstanding investment prospects, given that you possess sufficient funds or can manage the mortgage rates in Greece. Seizing this opportunity now, while the market is still recuperating from the previous crisis, could prove to be advantageous.