Home Loans for First Time Buyers in Malta

As very often happens, many first time buyers seek that extra financial assistance when they set out to buy a property for sale in Malta. It is all very well to decide to take out a home loan with a bank, but what about the bank’s perspective on the matter? Checking things out with the Bank of Valletta’s Home Loans Department helps to provide some insight into the matter.

First-time buyers in Malta

First-time buyers in Malta are the first most likely category to seek a bank loan and in fact comprise on average, 60% of all new applicants. It is standard banking practice to request customers to provide a contribution towards the purchase price of the property so they finance part of the acquisition costs from their own funds. Typically for first-time buyers in Malta first-time buyers this contribution or deposit, would be in the region of 10 – 20%* (*depending on a number of variables). Being usually young and still in their early working years, first-time buyers, at times, find it difficult to raise this contribution/deposit.

When asked whether the bank differentiates between a first-time buyer who is single, a married couple or a co-habiting couple, the bank’s representative commented,

“The Bank determines the eligibility to a home loan primarily on the basis of repayment capability, if it is affordable, and represents a fair banking risk, irrespective of whether the customer is a Maltese national or a foreign purchaser.”

Avoiding disappointment

A typically problematic first-time buyer scenario is being faced with customers who have already shopped around for a property for sale in Malta before checking how much they can actually borrow.

It can be very frustrating for people to fall in love with a property which they cannot really afford to buy. We urge potential customers to first work out how much they can possibly borrow, before going through property searches on the property list to avoid disappointment when faced with non-affordability. 

The BOV website includes a loan calculator which guides customers when calculating repayments, but BOV staff members are always on hand to offer advise. Read more about BOV’s new and improved home loan packages for first-timers buying property in Malta. 

First time buyers home loans

It is definitely not in a bank’s or its customers’ interest to loan or borrow more than can be repaid. Even whilst Malta faces the phenomenon of global recession, the recent adjustment in residential property prices has certainly affected this chunk of the market, generally rendering the acquisition of a first property rather more affordable. However, as a Bank, BOV believes it is its corporate social responsibility to guide customers and ensure they do not allow their hearts to rule their heads, even if this means applications for loans that are not affordable must be turned down.

With a constant influx of foreigners opting to purchase real estate in Malta or Gozo, the bank’s policy is that any customer or prospective customer can call any BOV Branch in order to enquire about home loan entitlement. Whilst the Bank requests customers to provide standard collateral items such as (but not limited to) hypothecs on the property for sale being acquired, life insurance policies, and insurance policies covering the house, where foreign investors

Home loan procedures

First time buyers home loans are concerned and depending on the particular circumstances of the case, these might need to make available additional security. However, this is always determined by the risk profile of the request rather than the nationality of the applicant.

Buying property in Malta or Gozo for the first time, even for second-time buyers, may be a daunting task however if you are careful and honest with what your needs are and do your homework correctly you are bound to have a smooth-running experience. It is always recommended that once you are aware of your budget you contact a professional real estate agent, like a RE/MAX agent, to assist you in finding the right home.