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Obtaining a Home Loan in Malta

If you're considering a home purchase in the near future, finding the perfect home is just one step in the process. Buying a home can be a fun and exciting experience however it is important to choose the right home loan.

Tip #1 – Start saving for a down payment

Depending on which local bank you choose, or the type of loan you choose, your required down payment can range from 2.25% to 20% of the purchase price of the home.

Tip #2 – Visit your local bank

Before searching for a property, it is essential to check with a local bank regarding how much you are entitled to borrow depending on your disposable income. This is required to ensure whether the bank will loan you the full amount.

Residents can obtain a flexible loan that can provide up to 90% of the purchase price of your property, with the loan repayment being spread out over 40 years. If you are purchasing a property with your spouse or partner, the disposable income of both individuals will be taken into consideration.

On the other hand, non-residents, can obtain loans that cover up to 80% of the property value, however this may vary in different situations. However, in the case of both residents and non-residents, monthly repayments should not exceed 30% of gross income.

Tip #3 – Prepare the following documentation

 When visiting the bank, it is important to present the required documentation which is needed to apply for a home loan and for the banks to be able to process the application efficiently:

  • An FS3 (Annual Employee Statement of Earnings reconciliation) as well as recent payslips to show income earned
  • A photocopy of the candidate’s ID card
  • An estimate of the property value by an architect
  • Any permits and plans of the property
  • Proof of any financial commitments, other loans or credit card debt
  • A copy of the preliminary agreement
  • A complete life insurance policy

In the case of a non-resident’s application for a home loan, all of the above is also required as well as additional documentation which varies depending on the applicant.

For a bank to successfully offer a home loan, the following terms are included:

  • Up to 90% of the purchase price for residents, or 80% for non-residents.
  • Monthly repayments of up to 30% of the gross income.
  • Flexible loan repayment terms of up to 40 years or until the age of 65.
  • Special interest rates during the first few years and for high value loans.

At Oyster, we help our clients every step of the way by connecting them to local banks. Whether you are a first-time buyer, or have experience in buying homes and acquiring loans, we provide ample support to explain the different types of home loans available and the process that this entails.

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