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How Do You Get a Mortgage in Austria?

August 03, 2022
Austria is one of the wealthiest countries in the world. It has a stable economy, plenty of natural resources, and it's a major tourist destination too. If you ever want to relocate to and own a property anywhere, this country would be a good choice! Just be aware, however, that it won't be cheap! Since it is an affluent nation, it's only natural that buying a a property in Austria will cost a lot of money. The only way you can pay for it is if you apply for a mortgage here. But how do you do it? Here's what you need to know about getting a mortgage in Austria.

How Do You Get a Mortgage in Austria?

The Required Documents in The Application

First things first, what do you need to apply for a mortgage in Austria? According to Expatica, the required documents include your valid passport, signed offer to purchase, proof of funds, bank statements, and any other property contract you may own. For your proof of funds, any proof of your employment or salary will do. Also, while it's not exactly a requirement, you're better off setting up a local bank account in Austria. This will increase your chances of getting the loan since most financial institutions will prefer that you have one. They'll even insist that you use Euros for this process as well.

The Types of Mortgages in Austria

Here in Austria, there are three main types of mortgages you need to know about. The first is a fixed-rate mortgage wherein you pay a standard amount every month within a period of time (usually around 15 to 30 years). It's the most common type that many buyers go for since it's relatively stable. The second is the adjustable-rate mortgage. Also known as the floating-rate mortgage, it may start out with an initially low rate, but it's a lot riskier compared to the fixed-rate mortgage. And third, there's the mortgage combination, which is essentially a mix of the first two.

How Do You Get a Mortgage in Austria?

What are The Mortgage Rates Here?

Now, let's talk about the mortgage rates in Austria. The mortgage rates are generally favorable in this country, typically ranging from around 2% to 4%. Though back in 2020, the rates reached a record low of 1.28%. They normally fluctuate but the effects of the Covid-19 pandemic led to the lowest rate yet. For now, after the pandemic, it's currently 1.5% and will eventually go back to the usual 2% to 4% range. You need to stay on top of this especially if you're going for either an adjustable-rate mortgage or a mortgage combination.

The Common Mortgage Costs in Austria

As with any other process, getting a mortgage comes with its own set of costs. One of the important ones is the one-time bank fee to get the loan. This will typically be between 1% and 3% depending on how much your loan is. If you hired a finance agent to help you with your application, you'll need to pay their commission as well. And when you put your credit condition in the Land Registry, this will cost you around 1.2% of your mortgage. Make sure you have enough money to pay all that before you apply for the mortgage.

How Do You Get a Mortgage in Austria?

Buying a new property in Austria can get pretty expensive. The only way to finance such an endeavor is to take out a mortgage loan here. So as long as you understand the process, there's barely anything you have to worry about!

#mortgage   #real-estate-tips   #buying-property   



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