A great benefit of buying property in Greece is that the process of obtaining a mortgage is relatively simple and remarkably similar to what we are used to in the UK.
Obtaining a Greek Mortgage
Having decided that a Greek mortgage is the best option for your circumstances, the next issue will be to determine how, practically, you go about securing the necessary finance. Of course, this process varies from lender to lender and the small print should always be checked carefully, before embarking on this stage of the purchase. Generally, the rules are as follows:
Determining the Amount you can Borrow
Unlike in Britain, there is no such thing as a self-certification mortgage. Consequently, any amount that you want to borrow will have to be in line with figures that you can support. If you are in employment, this is relatively easy and will require you to produce the last 3 months of payslips, your end of year tax statement, an employer’s reference and 6 months’ worth of bank statements.
Not all lenders will demand all of the above, but it is best to be prepared! For those who are self-employed, you will be expected to produce the latest audited accounts, 12 months’ worth of business bank account statements as well as 6 months’ worth of personal bank statements.
When deciding on the amount you can borrow, Greek lenders will almost never take into account any potential rental income. The amount that you can borrow will be entirely dependent on your earned income from employment (or self-employment, if applicable).
The amount that you will be able to borrow is based on your net pay and not on your gross pay, as, of course, is the case in the UK. Greek lenders will generally only allow you to borrow up to 35 percent of your monthly net income. For example, if you earn £2,000 net per month, you will be able to take out a mortgage where the repayments are equivalent to around £700 a month.
There are also limits based on the property’s value. This is normally at 80 percent of the value of the property (or of the valuation, if this is lower), although some lenders will allow a larger percentage in extreme circumstances.
Unlike some other European countries, Greek lenders do allow mortgages longer than 15 years. In fact, it is common practice for Greek lenders to allow mortgages for 25 years or more and to allow those up to the age of 73 to borrow. This is a vital point to note, as many UK lenders will not offer financing to anyone over the age of 60 or 65.
Interest rates in Greece are comparable and generally slightly more favourable than those in the UK, but are in no way as low as some other European countries.
In order to obtain a Greek mortgage, details of income will have to be given and proved, including personal bank statements, references and even audited accounts for the self- employed;
the amount of borrowing is dependent on net income and affordability, which is generally calculated as 35 percent of monthly net income;
mortgages are available up to the age of 73 and over 25 years, offering increased flexibility, particularly for older investors;
interest rates are comparable to those in the UK.