Mortgages in Malta

Securing a mortgage (home loan) in Malta is a relatively straightforward process for locals and expats alike, though the criteria differ depending on your nationality, residency status, and financial history on the island.

Maltese banks are traditionally conservative. They survived the 2008 global financial crisis largely unscathed because of their strict lending criteria, and they maintain these rigorous standards today. To get a loan, you must prove stable employment, a clean financial history, and the ability to cover the monthly repayments (which generally should not exceed 30% to 35% of your gross monthly income).

The down payment required by banks varies significantly based on your passport and the purpose of the property.

• Maltese and EU Citizens (First-Time Buyers): Generally require a minimum deposit of 10% of the property purchase price. Some banks offer special first-time buyer packages that might push this slightly lower under specific guarantee schemes.
• Third-Country Nationals (TCNs): Banks classify non-EU citizens as a higher risk because their right to reside in Malta is often tied to employment (Single Permit). Consequently, TCNs are usually required to put down a much larger deposit—typically between 20% and 30%.
• Second Properties / Buy-to-Let: Regardless of your nationality, if you are buying a second home or an investment property to rent out, banks will legally require a minimum deposit of 25% to 30%.

Note: Your deposit must come from your own savings. Banks will ask for 6 to 12 months of bank statements to prove the "source of wealth" for this deposit to comply with strict anti-money laundering (AML) laws.

1. Approval in Principle: Before viewing properties, visit a bank to get an "Approval in Principle" (AIP) quote. They will assess your salary and tell you your maximum borrowing limit.
2. Sign the Konvenju: Once you find a property, you sign the Promise of Sale (Konvenju) with a Notary. This contract usually has a specific clause stating the sale is "subject to bank loan approval" within a set timeframe (usually 4-6 weeks).
3. Formal Application: Submit your Konvenju, ID/Passport, minimum 3 recent payslips, your FS3 (annual tax form), and an Architect’s Valuation Report (certifying the property is worth the asking price) to the bank.
4. The Sanction Letter: Once the bank approves the loan, they issue a formal "Sanction Letter." This is a legally binding contract detailing the loan amount, interest rate, and terms.
5. Life and Home Insurance: *Crucial Step.* You cannot draw down the loan until you have Home Insurance (covering rebuilding costs) and Life Insurance (covering the total loan amount). The Life Insurance policy must be legally pledged to the bank. Expat Warning: Life insurance requires medical questionnaires and sometimes physical checkups. Start this process immediately, as it is the #1 cause of delays in property purchases.
6. Final Deed: The bank sends a representative to the Notary's office on the day of the final deed signing to hand over the funds (usually via a bank draft) to the seller.

Unlike some countries where independent mortgage brokers rule the market, in Malta, you typically apply directly to the retail banks. It is highly recommended to "shop around" and get quotes from at least three banks, as interest rates and administrative fees can vary.