If you ask ten expats what scares them most about buying a house in Italy, at least six will say “the mortgage.” Can you actually get one if you’re not a resident? Will the bank even talk to you? How much do you need to put down?
We get this question so often that we brought it up in our latest podcast episode (out this Saturday morning!) with Justin Curtis Mavity, a real estate agent who works with foreign buyers across Italy every day. In the last episode, we talked about the different “traps” while buying property in Italy. This time, we’ll go into the details on getting a mortgage in Italy, but in the meantime, here’s a little overview of how the process works.
Step zero: can you even buy property in Italy?
Before worrying about mortgages, sort out whether you’re allowed to buy in the first place. Whether you can or not depends on something called the treaty of reciprocity between Italy and your home country. For example, if you’re from the EU, no issue. If you’re American, no issue either – the US and Italy have this agreement in place, so US citizens can buy without restriction.
For other nationalities, it depends on whether Italy has a matching arrangement with your country – as a rule of thumb, if an Italian could buy property where you’re from, you can generally buy in Italy. Still, make sure to double check before you get too far into planning.
So, can a foreigner actually get a mortgage in Italy?
Yes, foreigners can get a mortgage in Italy, including non-residents. But it’s a different game than back home, and the sooner you understand the rules, the smoother it goes. Obviously, as anywhere in the world, you need to have a good financial background to make that happen. If you have one, generally, a 40 to 60 percent loan is possible.
Italian banks will finance a portion of the property’s value, and for non-residents that portion tends to sit lower than what an Italian resident could get. So residency obviously helps and makes everything easier, but it’s not a dealbreaker either way. If you’re living abroad, and have a solid financial background, you can still make this happen. What actually matters more is whether you can show the bank a clean, well-documented financial history – and that’s true whether you’re planning to move to Italy full time or just want a second home while keeping your life exactly where it is.
What the bank actually wants to see
The choice of where you apply matters almost as much as what you’re applying with. As Justin said, it’s like when you open a bank account as a foreigner – you’re generally better off at a branch in a big city center, where staff are more likely to speak English and are already used to handling foreign paperwork and regulations. Smaller branches in small towns aren’t necessarily unwilling to work with you, they’re just less likely to have handled a non-resident file before, which can slow everything down.
Italian banks lending to foreigners are, understandably, being more careful than they would with an Italian resident who already has a track record in the local system. So they lean harder on paperwork. As with anything else – whether it’s a visa application or this – the more background you can provide, the better. A bank can easily ask you for three years of past employment history, income, and tax returns.
The documents you’ll typically be asked for include a valid passport, your codice fiscale (the Italian tax ID number, which is free and easy to get through the Agenzia delle Entrate or an Italian consulate before you even start), a couple of years of tax returns, twelve months of bank statements, proof of employment or, if you’re self-employed, registration documents and income records, payslips, and information on any existing debts or other assets. If you’re bringing in a deposit from savings abroad, be ready to show where that money came from too. Most banks will also want you to have already opened an Italian bank account, since that account is often where the mortgage is actually serviced.
If you’ve ever dealt with a mortgage in another country, say the US or UK, none of this will be news to you. The difference is that everything typically needs to be translated into Italian, and often needs a certified or sworn translation, which adds both time and a bit of cost. So make sure to build that into your planning early rather than discovering it two weeks before a deadline.
Broker, or straight to the bank?
Not every Italian bank lends to non-residents, and the ones that do it consistently are a short list – which is exactly why most foreign buyers go through a mortgage broker rather than approaching banks one by one. A broker’s job is knowing which lenders are actually worth your time and shopping your file across them, which saves you from cold-calling banks that were never going to say yes.
Brokers work on commission calculated as a percentage of the loan, and there’s no industry-standard rate – figures anywhere from roughly 1% to 3% of the loan amount are normal, with the higher end being less common. The one exception where going straight to a bank makes sense is if you already have history there: an account you’ve held for years, or a personal relationship with a banker. Without that kind of existing footprint in the Italian system, a broker is generally the more practical route in.
Start the mortgage process before you start house-hunting
This is probably the most counterintuitive part for anyone used to shopping for a house first and sorting out financing once they’ve found “the one.” Justin’s advice runs the opposite way: get your mortgage groundwork started before you’re seriously looking at properties, not after.
Realistically, budget around a month just to get set up with a broker and have your documentation ready for them to shop around the banks. Once you’ve actually found a place and made an offer, add roughly another month or so for the bank’s appraisal and approval process. Altogether, that puts most foreign buyers somewhere around two to three months from starting the paperwork to sitting down at the notary.
Part of why starting early pays off is a fairly recent development in the Italian market: a form of mortgage pre-approval that lets a broker get a read on whether a bank is even interested in you as a client before you’ve committed to a property. It’s not offered by every lender yet and it isn’t a guaranteed approval, but it can save you from wasting weeks pursuing banks that were never going to say yes.
What happens if the bank says no after you’ve made an offer
Some countries have a standard window baked into the system – in the UK, mortgage offers commonly hold for around 90 days. Italy has no such default. It’s entirely down to what’s negotiated into your specific offer.
This protection is called a mortgage contingency clause (clausola sospensiva per mutuo), and it needs to be written explicitly into your purchase offer before you sign anything. It sets a deadline by which you must receive a formal answer from the bank – commonly somewhere around 40 to 45 days for foreign buyers, since the underwriting takes longer than it would for a resident. If the bank rejects the loan within that window, the deal is off with no penalty. Skip this clause, or leave the window too short, and a rejected application can leave you contractually and financially exposed instead of protected.
The costs beyond the mortgage itself
Something that trips a lot of buyers up: the mortgage covers the property, not the transaction costs around it. Budget separately for a property valuation (typically a few hundred euros), a bank arrangement fee (often a small percentage of the loan), a notary fee to register the mortgage, your broker’s commission if you used one, and – if you don’t speak Italian fluently – a certified translator, since you’ll want (and in some cases need) one present when you sign the final deed in front of the notary. There’s also a mortgage registration tax, which is a small percentage of the loan amount and differs depending on whether the property will be your primary residence or a second home. None of these costs are enormous individually, but together they add up to a real number you should have set aside before you get anywhere near signing day.
If you want to hear the full conversation with Justin – including what happens when the paperwork on the seller’s side isn’t in order, and why “vacant possession” is the phrase every foreign buyer needs tattooed on their forearm – tune in this Saturday morning to the Magic Towns Italy podcast!
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