Italian Mortgages

Buying a property in Italy may be an attractive investment - as your main residence, as a 2nd residence for vacations, or to rent out as a source of income.

Property prices in parts of Italy may be relatively cheap - certainly compared to the UK - but are currently  increasing rapidly.  If you rent out your property in Italy, you may offset the interest you pay on a mortgage for the property against the rental income for tax purposes.

You may borrow up to 80% or more of the property value - increasing to 95% for more properties requiring significant improvements.  The typical mortgage terms are between 5 and 25 years.  Mortgages are normally repayment mortgages, often at a fixed rate. Italian interests rates are currently lower than UK rates but higher than in the USA.

The amount you can borrow will be limited by what you can afford to repay.  Only about a third of your income should be required for monthly repayments, and you may only include proportion of any rental or investment income in this.  You will need to provide proof of income - self certification mortgages are not generally available in Italy.

You will need to take account of currency exchange issues.  If you do not borrow the money in Euros, you may need to pay up to 5% to convert what you have borrowed into Euros before you can use it for purchasing a property in Italy.  Currency fluctuations can work for or against you - the cost of converting currency will always be against you.

You are strongly advised to seek professional legal help from a specialist lawyer who speaks Italian well and can offer advice on the Italian Legal system.

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