Should I Get A UK or Maltese Mortgage?

Maltese banks will happily give mortgages to foreign buyers, and you should have no problem getting a mortgage for your Maltese property if you choose. Depending on your circumstances, however, you may find it more advantageous to borrow the money required for your property in the UK – either by:

  • Remortgaging your current home, if you have enough equity
  • Taking out a mortgage from a UK lender to buy your Maltese property (several UK lenders offer this service)

Borrowing the money you need in the UK has an advantage: There is a greater choice of mortgages, including interest-only and self-certification mortgages, which are not available in Malta.

Getting A Mortgage In Malta

Getting a mortgage in Malta is relatively straightforward, although the approval process can be a little slow – if applying for a mortgage it is best to start the process as soon as you sign the preliminary agreement (or even sooner, if possible).

There are several major banks in Malta that are happy to lend to foreigners but they do not offer the same range of mortgage products that are available in the UK. In particular, non-status (self-certified) and interest-only mortgages are not available.

Typical limits for a Maltese mortgage are:

  • Monthly payments no greater than 30 per cent of gross income
  • Mortgage terms of 10-20 years, or until 65th birthday
  • Maximum loan of 80% of property’s value (90% in some cases)
  • Slightly higher interest rates than the UK

Standard requirements also exist for proof of income – we’ve summarised some typical requirements below.


If You’re Employed

If you’re employed in the UK and are buying a property in Malta, you will need to provide proof of your income and employment status – for example:

  • Last 1-2 years’ P60 or payslips
  • Employer’s reference
  • Last 6 months’ bank statements
  • Proof of any other source of income you wish to be considered with your mortgage application

Pension and investment income will normally be accepted for a mortgage application, but no guarantee is made of this.


If You’re Self-Employed

As Maltese banks do not offer self-certification mortgages, self-employed applicants will need to provide documents similar to the following:

  • Last 1-2 years’ audited accounts
  • Last 12 months’ business bank statements
  • Last 6 months’ personal banks statements

You may also need a letter from your accountant providing details of your drawings from the business.


Rental Income

While rental of your home is generally permitted in Malta, potential rental income will not be taken into consideration in a Maltese mortgage application.


Read On