International Mortgages

Top 10 tips on Italian mortgages

Updated: Tuesday 6 March, 2012

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When applying for an Italian mortgage, make life easier by following our top 10 tips

If you’ve fallen for the charms of Italy and are planning to buy a property there, you might be thinking about taking out an Italian mortgage.

Our top tips are designed to help you find the best mortgage deal and ensure the mortgage application process runs as smoothly as possible.

For a basic introduction read our beginner's guide to Italian mortgages.

1. Plan ahead

There are plenty of things to think about when buying a property, not least the type of property and location you would prefer. When buying a foreign property, you should also think about how you will use it, for example, whether you’ll rent it out - and the implications this may have on the type of mortgage you need.

2. Know your budget

You can get a mortgage quote and an “agreement in principle” before setting out on a search for your dream Italian property. This will give you a good idea of how much you will be able to borrow and may help you make decisions about the type of property that might be suitable.

3. Give yourself time

Buying a property and taking out a mortgage is a big commitment and it’s likely that your repayments will account for a sizeable chunk of your outgoings, so it’s crucial that you allow yourself time to find the best Italian mortgage. Don’t just go for the first attractive offer you see and don’t be rushed into anything.

4. Watch out for extra costs

There are several extra costs that you need to take into account when working out the real price of buying a property in Italy. As well as your mortgage repayments, costs you need to consider include the bank’s arrangement and completion fees, the valuation fee, the solicitor’s fee, the mortgage broker’s fee, mortgage registration tax and buildings insurance.

5. Consider your circumstances

When searching for the best mortgage deal, it’s essential to look for a mortgage that suits your own circumstances. You can calculate your potential monthly repayments with our mortgage calculator to assess affordability, but should also look at whether the mortgage has features that may suit you, for example, an overpayment function.

6. Prepare your documents

Italian lenders will assess your eligibility on your ability to repay the mortgage, and to do this they will want to see proof of your income and outgoings. Other documents they require may include proof of your identity and residency, bank statements and property details, so it’s best to make sure you have these ready for inspection.

7. Maximise your deposit

The bigger the deposit you can build up, the better Italian mortgage deal you are likely to be eligible for, as you will be likely to be seen as lower risk by lenders. If you haven’t built up much of a deposit yet, check out our guide to getting into the saving habit, and however much you have managed to save, make sure it is getting the best returns with our top tips to getting the best savings rate.

8. Avoid early repayment charges

When looking at mortgage deals, watch out for those that apply early repayment charges (ERCs), which are also known as early redemption penalties, and could cost you dearly if you want to overpay your mortgage or decide to pay it off early. They are more common on fixed-rate mortgages than variable-rate mortgages, but you should always check the small print for details.

9. Consider exchange rates

If you are taking out an Italian mortgage in Euros, but planning to continue earning your income in the UK, you need to think about how changes in currency exchange rates could affect the sterling cost of your monthly euro repayments. You should seek professional advice on how to manage the risk of currency fluctuations.

10. Use a mortgage broker

Getting an Italian mortgage is not always simple, and it might help if you use an international mortgage broker who can act as a go-between between you and the Italian banks which offer mortgages. As well as searching the market for the best deals available, brokers often have exclusive deals with Italian banks that you might not normally gain access to.

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