You can take out a mortgage from a Russian bank, but only Sberbank and VTB24 are ready to issue such loans, says Maria Kone, General Director of RMC Global. Mortgage rates in Europe are lower than in Russia, so many buyers prefer to take a loan in the country where they are purchasing property.
If mortgage rates in Russia are 12–14%, then in Europe it is 5% on average. However, in Europe there may be a floating interest rate, and this is risky, so the stability of the economy plays an important role in this case, warns Igor Mikheev, head of the legal portal Lex-finance.
• By the way, you can also get financial help from private companies. For example, you can take out a small payday loan from Top Credit, and the application is processed online, and you can receive funds either in cash or by transfer to a bank card. You can borrow up to 15 thousand hryvnias this way, and the loan servicing will cost 19 UAH per day for each borrowed thousand.
Mortgage lending conditions vary in different countries. According to experts, it is easiest to get a mortgage in the UK, France, Austria and Germany.
“Mortgages in these countries are issued at 3-4% per annum, the attitude towards Russians is positive, and to get a loan you need to provide all documents that confirm your income, plus papers about your real estate and car. The more documents you provide about your solvency, the easier it will be to get approval,” says Maxim Raevsky, a member of the board of directors of the development company Stroyinvesttopaz.
Getting a mortgage becomes somewhat easier if the developer themselves offers a mortgage or installment plan. “The most favorable lending terms are installment plans from the developer. For example, in Bulgaria it is provided for up to one year without interest. In the US and UK, developers do not offer anything like this, but small banks offer exactly these conditions,” says Anya Levitova, managing partner of EVANS, a company dealing with foreign real estate transactions.
Excellent conditions for lending to buyers and investors from Russia have been created in Germany, experts believe. Mortgages for Russians here are offered at low rates, applications are processed quickly. According to Anya Levitova, an additional advantage when approving a loan may be the presence of income in Germany. This also applies to investment properties – for example, income-generating buildings and commercial real estate.
According to experts, difficulties may arise when buying inexpensive real estate. For example, in the UK they are reluctant to give a loan for less than $500,000 – at low rates, it is unprofitable for banks.
It is difficult to get a mortgage in countries with unstable economies. “Difficulties in obtaining loans exist not only for foreigners but also for local residents in Italy, Greece, Cyprus, Croatia, Montenegro. The high cost of borrowed money will be in Bulgaria, the Czech Republic and other countries with slowly developing financial systems,” says Marina Alekseeva, director of Just Real Consult GmbH.
Among Russians who do not plan to leave the country now but want to have this opportunity in the future, Latvia is popular. There it is quite easy to obtain a residence permit when buying real estate, but from September 1 the minimum purchase amount will more than double – to 250 thousand euros.
Latvia is known for the fact that decisions on mortgage provision are made quite quickly here, the maximum application review period does not exceed three to four weeks. Non-residents receive loans from both local and foreign banks – Rietumu banka, Aizkraukles banka, Citadele, SMP Bank and Swedebank, says Marina Alekseeva.
However, to get a mortgage in Latvia, you need to have a resident guarantor and a stable “white” income in Russia. The loan term depends on the borrower's age, but usually the mortgage is issued for ten years. The loan for non-residents is typically offered at 4-5% per annum. The maximum loan amount is up to 80% of the appraised value of the property.
In Lithuania, mortgage loans are issued by local banks only if the borrower has a residence permit in the country. You can get a mortgage on Lithuanian property from Russian banks – but the rate will be 15-18% per annum.
Regardless of the lending country, you will need to contribute your own funds of about 20-50%, provide documents confirming solvency and ownership of property in the country of permanent residence.
All documents are provided in the language of the country where the loan is processed. Often the translation must be done by an official translator and certified at the consulate.
Experts agree that it is best to seek help from a special agency that will handle the transaction “turnkey,” or use the services of local private lawyers and brokers by recommendation.
Consultants warn that much in Europe depends on brokers. Some of them have long-term relationships with banks, can recommend a client, and also offer a property for which the bank will provide money.