Real estate
June 13, 2024
Reading Time: 7 min

Cyprus mortgage for expats: a complete guide with rates, terms, and risks

Cypriot banks offer beneficial mortgage terms to real estate buyers. The average mortgage rate is 4% per year, affected by the housing cost, mortgage terms, and the borrower’s banking history.

It is challenging for foreigners without residence permits to take out a mortgage. But one can become a Cypriot resident on various grounds. Wealthy people prefer to obtain a permanent residence permit directly by investing €300,000 or more.

Igor Buglo
Igor Buglo

Explained how to take out a mortgage in Cyprus

Cyprus mortgage for expats

Cyprus mortgage for expats: a complete guide with rates, terms, and risks

Reasons to take out a mortgage in Cyprus

A liquid asset, additional income, the opportunity to obtain permanent residence and optimise taxes are the main advantages of buying property in Cyprus.

Cyprus Permanent Residency by Investment in !year: a Golden Visa with a Purchase of Real Estate, Securities and Bonds

Cyprus permanent residence by investment

One can buy property in Cyprus with a mortgage. Residents and citizens of the country take out mortgages easily, while foreigners face restrictions. Besides, they cannot obtain a residence permit when buying a property with a mortgage.

Benefits of a mortgage in Cyprus:

  • a high loan amount of up to €1,000,000;

  • a relatively low interest rate, which varies from 1.9 to 7,5%;

  • a mortgage can be taken for a period of 5 to 40 years and repaid ahead of schedule;

  • the maximum monthly mortgage payment cannot exceed 30% of the income;

  • high percentage of mortgage approval for new buildings as many new residential complexes are being built on the Cyprus coast;

  • you can rent out a mortgaged apartment and make a profit from it;

  • developers actively help buyers with paperwork for a mortgage.

Cyprus attracts not only with real estate investments but also safety, a high standard of living, high-quality medicine, and a pleasant climate. The island is often chosen for moving with children or for retirement.

Properties that can be bought in Cyprus with a mortgage

Cypriot banks provide mortgages for residential and commercial properties, new and resale. At the same time, people who buy apartments in new buildings receive a higher percentage of mortgage approvals.

Banks offer special mortgage programs when buying property in a new building:

  • the down payment is 10 to 30% of the total property value for a new building and 40 to 50% for resale real estate;

  • a mortgage rate for new property is lower and ranges between 1.9 and 4,5%, and it is 5 to 7,5% for resale properties;

  • when buying property in new buildings, the developer stands as the guarantor of the transaction, so the chance of getting a mortgage in a bank is higher;

  • a bank may require a certificate of property registration to purchase a resale apartment. The bank may refuse a loan if the seller does not have it.

Areas and cities to buy real estate. Cyprus is best known for its relaxed Mediterranean lifestyle. Many residential complexes are being built in the island’s coastal areas, and foreign investors often buy property there. The coastal cities of Limassol, Paphos, and Larnaca attract them the most.

The capital of Cyprus is also popular: Nicosia has a developed infrastructure, offices of local and international companies, government agencies, kindergartens, schools, and clinics — everything you need for a comfortable life with your family.

Cyprus’s property is getting more expensive yearly but still costs less than in other European countries.

Map of Cyprus with average prices of 1 m² in different cities where you can buy an apartment with a mortgage

The most expensive property is on the coast, where many foreigners live

Mortgage application process in Cyprus

There are two ways to obtain a mortgage loan in Cyprus: on your own or with the help of an agency.

In the first case, a foreign investor seeks a property and a lawyer to support the transaction. The costs are lower, but the investor needs to be fully involved in the process. The second way is to contact a developer or a real estate agency handling the mortgage.

1

Get preliminary approval

The investor applies to a bank and fills in a questionnaire specifying the down payment amount. The bank analyses the information about the borrower and names the mortgage amount it is ready to approve.

2

Choose a property

The buyer starts looking for a suitable property when the approximate mortgage amount is known.

3

Hire a local notary

A notary accompanies real estate transactions in Cyprus. They check the legality of the transaction and follow it at the bank.

If the investor buys property through an agency or developer, this agency or developer provides a lawyer.

4

Open a bank account

The buyer needs a bank account to transfer money to the seller. The account must be opened at the same bank where they plan to take out the mortgage.

One can apply for an account online, but it will only be registered after a personal visit to the bank.

5

Reserve the property

The buyer reserves the property and pays the seller a deposit of up to 10% to remove the property from sale.

6

Get purchase permission

Foreigners obtain a permit to purchase property from the Council of Ministers of Cyprus. When buying a property in a new building, the seller, either the developer or a real estate agency, obtains approval for the buyer.

7

Make a down payment

The investor makes the first instalment from their own funds; the contribution can range from 10 to 50% of the total housing cost.

8

Apply for a mortgage

The buyer applies for a mortgage. The bank checks the applicant’s documents and the property. Then, it issues the loan.

9

Sign a sale and purchase contract

The parties sign a sale and purchase contract when the mortgage is approved. The transaction gets certified by a notary, and under their control, the rest of the amount is transferred to the seller’s account.

10

Register ownership

The investor registers the property with the Land Department of Cyprus within 2 months of the purchase. For a resale property, the buyer pays a 3 to 8% transfer tax for every €85,000.

Mortgage processing costs

A foreigner can take out a mortgage of €75,000 to 500,000, excluding the down payment. The higher the down payment, the more likely it is to get mortgage approval from the bank.

The property buyer pays a commission to the bank — 1% of the mortgage amount. For example, if a mortgage loan is €100,000, the investor pays €1,000.

When buying real estate, obligations include stamp duty, VAT, and a property transfer tax.

Stamp duty is a one-time tax paid within 30 days of the real estate purchase. The rate depends on the property value:

  • up to €5,000 — 0%;

  • up to €170,000 — 0,15%;

  • over €170,000 — 0,20%.

The standard VAT rate in Cyprus is 19%. It is paid when buying a new house or apartment in a new building. The VAT rate can be reduced to 5% if the property is purchased for the buyer’s residence for the first time.

The reduced VAT rate applies to the first 130 m² of property worth no more than €350,000, provided that the total transaction value does not exceed €475,000 and the built-up area is up to 190 m².

The property transfer tax is paid only by buyers of resale real estate. The tax rate is calculated on a progressive scale and depends on the property value:

  • 3% — up to €85,000;

  • 5% — up to €170,000;

  • 8% — over €170,000.

Additional expenses when buying a property in Cyprus

The buyer’s costs depend on the services they use. These include the following:

  • real estate agency services — up to 5% of the transaction value;

  • property evaluation — €285+;

  • documents registration by a notary — €100+;

  • property insurance — €350+ per year;

  • life insurance for the borrower — €800+.

Property insurance premiums and the borrower’s life policies depend on various factors and the mortgage amount. The longer the loan repayment term, the lower the insurance payments become.

If the investor plans to rent out the apartment, they will also be required to pay tax fees on a progressive scale.

Cypriot banks providing mortgages for expats

Foreign buyers with residence permits can take out mortgages from any bank in Cyprus. However, only a few financial institutions grant credit to non-residents. The most well-known bank is Hellenic Bank. Let’s consider the offers of the largest banks in the country.

Hellenic Bank is ready to provide a mortgage of up to €1,000,000 with a fixed interest rate for 3.5 or 10 years. The maximum loan is 80% of the property value.

For a loan up to €500,000 for 30 years, the rate will be 3,5% with the minimum down payment of 40% of the property value.

A loan secured by real estate can also be issued to non-residents. The bank provides a loan with a variable rate of 4,37% per annum. The maximum loan amount is €500,000, while the repayment period is 25 years.

Bank of Cyprus finances up to 80% of the property value with a fixed interest rate for 3.5 years or 10 years. After the fixed interest period, the rate can be changed to a variable one.

For mortgages over €100,000, the maximum repayment period is 35 years, of which 2 years are favourable.

The bank issues housing loans at a rate starting at 3,75% for up to €150,000 with a repayment term of up to 30 years.

Alpha Bank. The amount of the home loan covers up to 70% of the property purchase price. The borrower repays the loan in equal monthly instalments over 10 to 40 years, including a grace period of 2 years.

For a loan of €100,000 or more, the interest rate starts at 5,5%.

AstroBank finances up to 70% of the property value. The maximum mortgage repayment period is 40 years. The rate for a €100,000 mortgage with a 20-year loan repayment period is 4,9%.

Ancoria Bank offers mortgage loans up to €300,000 and finances up to 80% of the property value. The maximum repayment term is 35 years. The base interest rate is 3,45%.

Eurоbank of Cyprus issues a mortgage that covers up to 70% of the property value. The maximum repayment period is 30 years. For a €100,000 mortgage loan, the interest rate varies from 3,75% for the first two years and 4,26% starting from the third year.

Comparison of mortgage terms of Cypriot banks

Bank

Interest rate

Maximum mortgage amount

Maximum loan repayment period

Ancoria Bank

3,45%

80% of the property value

35 years

Hellenic Bank

3,5%

80%

30 years

Bank of Cyprus

3,75%

80%

35 years

Eurobank of Cyprus

4,26%

70%

30 years

AstroBank

4,9%

70%

40 years

Alpha Bank

5,5%

70%

40 years

Example of a mortgage calculation

Suppose an investor buys a property worth €150,000. €100,000 is a mortgage granted for 30 years at 4,5% per year. In this case, the monthly payment would be €506.

In addition to the loan, the borrower will also pay:

  • €100 — notarial services;

  • €50 — documents preparation;

  • €168 — stamp duty;

  • €1,010 — bank commission for issuing a loan;

  • €142 — property valuation;

  • €12,240 — life insurance for 30 years;

  • €4,500 — property insurance for 30 years.

In total, the buyer will spend €18,210 on the mortgage.

Mortgage application processing timeframe

Cypriot banks consider documents for issuing a loan for up to 1 month. The bank approves the application if the documents are drawn up correctly, and the borrower’s income meets the conditions.

The mortgage process takes about 2 weeks. If the bank has questions about the documents and the buyer has to send confirmations, the time for consideration of the application may increase to 2 months.

Mortgage risks

When applying for a mortgage, there is always a risk of rejection by the bank. Refusal reasons vary; for example, they may be the following:

  • the borrower paid an insufficient amount as a down payment;

  • the borrower failed to prove the legality or level of income for obtaining a loan;

  • the bank has not verified the property;

  • the property has no title of ownership, i.e. it is subject to restrictions.


It is better to use the services of a real estate agency or developer to reduce the risk of rejection.

Cypriot banks issue mortgages in euros, so it is affected by changes in the lending rate of the European Central Bank. The risk is that even a 0,5% change in the rate can lead to a several hundred euros increase in the monthly payment.

Requirements for applicants and necessary documents for Cyprus’s mortgage

The mortgage loan is available to applicants aged between 18 and 65 with a regular income sufficient to meet the minimum monthly instalment. This is usually 33% of the total income.

The borrower submits a package of documents to the bank to take out a mortgage, including the following:

  • an international passport;

  • a residence permit card;

  • a filled-in application form;

  • a bank statement confirming income for the last 3 months;

  • a bank statement for the previous 6 months;

  • a sale and purchase contract;

  • prepayment confirmation for the property;

  • medical insurance;

  • a title deed for a resale property;

  • permission from local authorities to purchase property in Cyprus;

  • proof of payment for stamp duty;

  • a tax return for the last 3 years;

  • a statement of loan payments for the last 3 years, if there were any.

If an individual entrepreneur applies for a mortgage, they must also provide:

  • tax returns for the last 3 years for all companies owned by the borrower;

  • copies of the company’s constituent documents.

The bank has the right to request additional documents, such as financial documents of the company or information about the income of the borrower’s spouse.

Checklist: things to know about Cyprus mortgage

  1. The average Cyprus mortgage rate is 4%, and the average mortgage term is 35 years. The housing cost, mortgage terms, and the borrower’s banking history affect the rate.

  2. Cyprus’s residents and citizens can take out mortgages in any bank. At the same time, the choice for foreigners without residence permits is limited: Hellenic Bank will issue the loan.

  3. The process of taking out a mortgage lasts for 2 weeks to 2 months, not including the choice of property.

  4. A mortgage can be denied for various reasons, such as the borrower making an insufficient down payment or being unable to prove sufficient income.

  5. An investor can obtain a Cyprus permanent residence permit by purchasing a property worth €300,000 or more.

Immigrant Invest is a licensed agent for citizenship and residence by investment programs in the EU, the Caribbean, Asia, and the Middle East. Take advantage of our global 15-year expertise — schedule a meeting with our investment programs experts.

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