Is mortgage possible for a property in Mauritius? What are the conditions?
When it comes to the acquisition of a property in Mauritius, it often requires the setting up of a bank loan.
It can be for either Mauritian or foreign investors ; all of the financial institutions in island offer tailor-made financing solutions to meet different projects and different needs.
The principle is same as any place in the globe, to obtain a loan in Mauritius, one must go through:
- A study of the borrowerby the financial institution / bank,
- The establishment of a guarantee"Assurance death / disability” to lend in euro currency leading a lower costs compared to usual,
- In some cases, the mortgage is place on the property,
- The interest rates on loans can be fixed or adjustable depending on the loan duration and, in certain cases the ability to repay it early with less cost (under certain conditions)
- The maximum duration of a home loan is subject to the age of the borrower. Generally, it differs between 25 and 30 years, but it remains at the discretion of the bank or financial institution in question.
Note: All banks or funding agencies offer loans in rupees or in € currency to residents and non-residents.The interest rates for these loans are around 7% (Fixed rate) and 3.5% (Variable rate referred to the Euribor rate, which is one of the main referenced money market area for rates).The furniture pack and government taxes will not be included in the supporting.
Mandatory* administrative documents required during the acquisition of a real estate in Mauritius:
· National identity card or passport
· Marriage contract (if necessary)
· Birth certificate
· Title of deeds of the property (Property titles)
· Building Permit (for local construction)
· Copy of the Financial Completion Guarantee(GFA) (For Investment Schemes like IRS, RES, PDS, Smart City)
· Copy of the LOA issued by theBoard of Investment (BOI) of Mauritius concerning the New Program (for Investment Schemes such as IRS, RES, PDS, Smart City)
· Plan of the construction of the property
· Insurance (fire, cyclone and other risks) or,
· Trustee Letter (Not applicable to acquisition of land)
· Pay sheet over the last 12 months and sources of income
· Balance sheets for the last 3 years (for legal entities)
... Non-ending list.
The below are somecriteria to studywhen applying for a mortgage
Your debt ratio:
Before becoming a home owner, the first step is to determine your borrowing capacity, which allows you to evaluate the budget that will be allocated to the real estate acquisition.
The borrowing capability will be calculate during a maximum debt ratio of 35 to 40 %in relation to the income of the future owner.
Each bank and credit establishment will have their own rule books to define the incomes and costs which are included in the beneath calculation.
The ‘Standard to Live’:
The ‘standard to Live’ is a key indicator of a household's standard of living in assessing their ability to borrow leading tothe amount remained after deduction of fixed charges.
Standard to Live = Household Income - Fixed Expenses
Fixed charges include:
· The rentof are main house
· Housing expenses (insurance, water, electricity, telephone, heating etc...)
· Ongoing loans
· Taxes on transportation costs
· Credit repayments
* The information above refers to a real estate loan transaction and is strictly for informational purposes only.