What’s your budget for buying a property in Europe?

When considering buying a property in Europe, the amount you can borrow varies across different markets. Discover everything you need to know about mortgage eligibility and opportunities for UK citizens looking to invest in the European property market.

Delia Mihuț
Written by Delia Mihuț
Published at 2023-06-20T09:17:40Z
Last updated at 2023-10-20T11:55:59Z
Readtime 8 minutes

Are you a UK citizen considering buying a property in Europe? As you explore the local property markets to assess affordability, have you considered how a mortgage can maximize your budget? 

One innovative solution you might find interesting is Homevest, a service designed to speed up the mortgage process directly from abroad. 

Here's a quick guide to help you with budgeting for buying a property in Europe in 2023.

What’s the property market like in Europe?

Cross-border property buying is on the rise in Europe, particularly in Spain and Portugal, with a 50% yearly growth in non-resident buyers in Spain and a 30% increase in Portugal in 2022. In Croatia, non-residents purchased properties totaling 12,000 and accounting for 36% of the total value. Italy also witnessed cross-border transactions, representing 5% of the total property value purchased in 2022.

According to Homevest research, cross-border property transactions made up 2.5% of Europe's property market in 2022. This growing trend is fueled by sun-seekers, digital nomads, returning migrants, and property investors, all contributing to the increased demand for properties across Europe.

The property market in Europe offers diverse opportunities in countries like Portugal, Spain, Greece, and Romania. Portugal attracts international buyers with its stunning coastlines and tax incentives. At the same time, Spain provides a mix of investment and lifestyle options with its diverse landscapes and vibrant cities. Greece's rich history and islands make it a desirable destination for foreign buyers. As an emerging market, Romania presents affordable property options and growth potential.

Each country has regulations, property laws, and market trends that can impact your buying experience. 

Can UK citizens get a mortgage in Europe?

UK citizens can get a mortgage in Europe, with lending criteria varying depending on the country and lender. 

Key criteria for UK citizens seeking a mortgage in Europe include:

  • age limits (lenders generally impose an age limit of around 70-75 years at the end of the mortgage term)
  • credit history evaluation (a good credit history is essential, considering factors such as payment history and outstanding debts)
  • employment stability (lenders require proof of employment, such as employment contracts, payslips, bank statements, and tax returns) 
  • property type (lenders have restrictions or preferences for certain property types, such as apartments, houses, or vacation homes) 
  • deposit requirements (usually, a higher deposit can result in more favorable mortgage terms, such as lower interest rates)

It's important to note that these criteria are general guidelines, and each lender and country may have specific requirements and policies. 

What’s your budget for buying a property in Europe?

When considering buying a property in Europe, the amount you can borrow varies across different markets. 

Let's delve into the benefits of a cross-border mortgage that can boost your budget and help you find your ideal getaway in Spain, Portugal, Greece, and Romania.

Below is a comparison of property budgets, mortgage amounts, deposit requirements, and estimated taxes and expenses for different countries. These figures provide an overview of the financial aspects of buying property in Romania, Spain, Portugal, and Greece.

Country Property Budget Mortgage Deposit Taxes & Expenses
Romania €271,040 €186,400 €84,640 €8,960
Spain €240,015 €166,400 €73,615 €19,985
Portugal €239,200 €166,400 €72,800 €20,800
Greece €219,749 €141,400 €78,349 €15,252

Consider a hypothetical scenario where you are a UK resident with stable employment, relishing an annual net income of £80,000, accompanied by a deposit amounting to £80,000. 

Additionally, we will take into account that you are acquiring the property independently, currently carrying an existing mortgage in the UK with £250,000 left to be paid, for a property worth £500,000, while not possessing any other outstanding debts or assets. 

Moreover, the mortgage under discussion adopts a variable rate framework, encompassing a 25-year term.

Country Max LTV Max DTI Interest rate Taxes & expenses*
Romania 80% 38.5% 4.14% + IRCC 3-4%
Spain 70% 40% 1.2% + Euribor 12m 2-12%
Portugal 70% 40% 1.64% + Euribor 6m 2-10%
Greece 65% 35% 1.6% + Euribor 3m 5-7%

* Of total property purchase price

Here is a comparison of the maximum loan-to-value ratio (LTV), maximum debt-to-income ratio (DTI), interest rates, and estimated taxes and expenses for various countries. These figures offer valuable insights into the financing terms and additional costs of securing a mortgage in Romania, Spain, Portugal, and Greece.

Buying property in Spain as a UK citizen

Buying property in Spain as a UK citizen

What’s the property market like in Spain?

The Spanish property market has shown steady growth, recovering from the global financial crisis and witnessing a consistent increase in prices. 

In 2022, foreigners bought a record number of properties in Spain, 14,6% of the total purchase in the country. Among the favorite places to buy a house are Alicante, Balearic Islands, Malaga, and Tenerife. Major cities like Barcelona and Madrid also offer a vibrant real estate market with a mix of residential and commercial properties.

Location m2 price in City Centre m2 price outside of the Centre
Alicante 2,233 EUR 1,600 EUR
Palma de Mallorca 4,316 EUR  2,566 EUR
Malaga 3,704 EUR 2,375 EUR
Tenerife  2,080 EUR 1,500 EUR
Barcelona 5,073 EUR 3,159 EUR
Madrid 4,270 EUR 2,752 EUR

How easy is getting a mortgage in Spain as a UK citizen?

Any UK citizen can buy a property in Spain without being a resident. However, it's important to note that mortgage conditions may vary and can be more complex for foreigners. Demonstrating eligibility and providing evidence of declared income is essential.

One crucial requirement is obtaining the NIE, an all-purpose ID, and tax number in Spain, which is necessary for purchasing property and securing a mortgage.

Several Spanish banks, such as Sabadell, Cajasur, Unicaja, Bankinter, BBVA, and Santander offer mortgages for UK citizens interested in buying a property in the country. The good news is that most banks do not require translation or legalization of your English documents.

Keep reading a guide that covers everything you need to know when buying a property in Spain as a foreigner.

Buying property in Portugal as a UK citizen

Buying property in Portugal as a UK citizen

What’s the property market like in Portugal?

According to the latest data from the Portuguese statistical institute, Instituto Nacional de Estatística, the average property price in the country is approximately €1,187 per square meter, with apartments averaging €1,243 and houses averaging €1,090. 

It's important to note that prices in Portugal can vary significantly. Demand for Portuguese property by non-residents has caused a property boom in the country. While big cities have experienced a significant rise in prices, making it challenging for locals to afford properties, rural areas along the Lisbon coast still offer more affordable options. 

Location m2 price in City Centre m2 price outside of the Centre
Lisbon 5,590 EUR 2,936 EUR
Porto 2,745 EUR  1,720 EUR
Amadora 2,622 EUR 2,800 EUR
Albufeira 2,150 EUR 1,899 EUR

How easy is getting a mortgage in Portugal as a UK citizen?

UK citizens planning to buy property in Portugal can easily obtain a mortgage from local lenders such as Millennium BCP, BBVA, Santander, or UCI, who are familiar with the process and offer fixed-rate and variable-rate options for non-residents. 

The repayment terms are typically 25 to 35 years with competitive interest rates.

The minimum deposit for a mortgage is 30%, and the maximum loan-to-value ratio is 70% of the property purchase price. 

As in the case of Spain, one crucial requirement is obtaining a NIF, an Individual Tax Identification Number used in Portugal. 

In addition to obtaining a NIF, the necessary documents usually include a copy of your passport, bank statements, proof of address, and additional documents depending on your employment status and income sources.

Continue reading to learn all you need to know if you're considering relocation or buying a holiday home in Portugal.

Buying property in Romania as a UK citizen

Buying property in Romania as a UK citizen

What’s the property market like in Romania?

In Eastern Europe, Romania stands out as a country where the prices of houses and apartments have experienced significant increases in recent years, yet they remain highly affordable by Western standards. Romania's real estate market offers some of the most cost-effective options within the EU.

In 2022, the average selling price of apartments in Romania witnessed a year-on-year increase of 5.59%, reaching €1,682 per square meter. This growth rate reflects a significant deceleration compared to the 16.19% annual increase observed in 2021, as reported by imobiliare.ro.

Location m2 price in City Centre m2 price outside of the Centre
Bucharest 2,442 EUR 1,422 EUR
Cluj-Napoca 2,984 EUR  2,139 EUR
Timisoara 1,883 EUR 1,382 EUR
Sibiu 1,542 EUR 1,228 EUR
Brasov 1,630 EUR 1,252 EUR

How easy is getting a mortgage in Romania as a UK citizen?

Mortgage options in Romania are generally more accessible for Romanian nationals living abroad than for individuals of other nationalities. 

UK citizens may face more challenges when trying to obtain a mortgage in Romania. However, it's important to mention that Libra Bank is one of the few banks providing mortgages for foreign non-residents.

For example, one of the bank's requirements is that applicants have income from individual employment contracts - at least 10,000 lei net per contract.

The maximum loan period is 15 years, and the loan can only be accessed in Romanian Lei. The good news is that you don't need translations for your documents because Libra Bank accepts documents in English.

Buying property in Greece as a UK citizen

Buying property in Greece as a UK citizen

What’s the property market like in Greece?

In 2022, non-residents made real estate purchases in Greece amounting to €1.9 billion, marking a significant 68% increase compared to the previous year. Data from the Bank of Greece reveal that foreign investment in Greek real estate set a new record, with net investment reaching €1.9 billion in 2022, up from €1.1 billion in the previous year.

The Greek islands and coastal regions, such as Crete, Mykonos, Santorini, and Rhodes, are highly sought after by international buyers. These areas are popular for holiday homes and vacation rentals.

Location m2 price in City Centre m2 price outside of the Centre
Athens 2,622 EUR 2,592 EUR
Corfu 2,000 EUR  1,500 EUR
Santorini 4,500 EUR 3,000 EUR
Crete 3,482 EUR 2,500 EUR

How easy is it getting a mortgage in Greece as a UK citizen?

Non-residents face no restrictions when buying property in Greece, and Eurobank is one of the banks that offer mortgages to non-residents.

To qualify for a mortgage in Greece, applicants must be at least 25 years old, and the loan must be fully repaid by age 58. Meeting these criteria requires opening a bank account with a Greek bank and obtaining a Greek tax number, also known as AFM.

The maximum loan amount depends on your income but generally does not exceed 75% of the property price. Mortgage rates in Greece range from 3.5% to 7.5%, and the repayment terms can extend from 6 to 15 years.

If you're ready to buy property in Greece as a foreigner and turn your dream into reality, continue reading all you need to know

Homevest assists UK citizens in securing mortgages for properties in Europe while residing abroad

Navigating the system in a new country can be challenging, and the repeated preparation of required documents for each bank application can be frustrating.

Homevest provides a solution that saves time and energy in this process. 

With Homevest's digital service, you can streamline the application process for a cross-border mortgage and benefit from a mortgage comparison calculator to determine the costs associated with each option.

What are the advantages of using Homevest for your mortgage?

  • Quick and simple process: Homevest streamlines the application process by estimating a budget for your loan. This saves you time and simplifies the initial steps.
  • Convenient comparison: you can compare credit options from multiple lenders in one place. This allows you to easily evaluate and choose the option that best suits your needs.
  • Centralized document management: you can easily upload documents and forward them to banks, eliminating the hassle of repeatedly submitting paperwork.
  • Tailored support: Homevest provides personalized support and guidance throughout the mortgage application process. The team ensures that banks prioritize your application, increasing your chances of securing a favorable loan.
  • Free service: Homevest's services are completely free for borrowers. They earn their commission from the bank when a mortgage is successfully completed.

Sources used and checked in June 2023: 

  1. Property Prices in Barcelona, Spain
  2. Property Prices in Malaga, Spain
  3. Property Prices in Alicante, Spain
  4. Property Prices in Palma de Mallorca, Spain
  5. Property Prices in Madrid, Spain
  6. Property Prices in Tenerife, Spain
  7. Home purchasing by foreigners in Spain 2022
  8. Property Prices in Lisbon, Portugal
  9. Property Prices in Porto, Portugal
  10. Property Prices in Amadora, Portugal
  11. Propery Prices in Albufeira, Portugal
  12. Property Prices in Bucharest, Romania
  13. Property Prices in Cluj-Napoca, Romania
  14. Property Prices in Timisoara, Romania
  15. Property Prices in Sibiu, Romania
  16. Property Prices in Brasov, Romania
  17. Romania Real Estate Market 2023
  18. Home Real Estate Greece
  19. Property Prices in Athens, Greece
  20. Property Prices in Santorini, Greece
  21. Property Prices in Corfu, Greece
  22. Property Prices in Crete, Greece
  23. Mortgage in Greece for foreigners

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.

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