For Austrian property mortgages our property Professional is Gerald Buttinger. He has many years experience in the financial services, home insurance and car insurance cover in Austria. He can also help with registering a car for you, as a first time registration can be quite challenging.
He works with most Austrian Banks and financial institutions to get a Austrian property mortgage offer for our clients.
He speaks English, so you can be assured that your requests are dealt with in either native German or English.
Mortgage updates:
Update for 2024
Mortgages have become even more difficult to obtain and many of the compliances are to do with having a Euro income to support a mortgage. If you have the possibility to be paid in Euros, this can help overcome one of hurdles.
Generally it is easier for an EU citizen to purchase in Austria, but with certain properties it can be possible for non EU citizens to buy. Particularly if the property is a managed apartment, such as in an apartment hotel.
Many clients, are interested to buy a B&B, Guesthouse or an Apartment house. These all generate an income in Euros, so would cover the criteria needed by the Banks.
The other option is to look at properties that can be holiday rented, thereby creating a business model with a Euro income. Although it is preferable that a proeprty has been trading and can show an income in Euros.
Financing News Updates
Higher hurdles for home loans:
What has applied since August 2022
Stricter criteria for granting private real estate loans will come into force. The banks’ compliance with the new standards will be monitored in many ways.
From 1 August 2022, it has become more difficult for some families to obtain a loan to build a house or buy a flat. The Credit Institutions Real Estate Financing Measures Ordinance of the Financial Market Authority. It covers amendments to the Assets, Earnings and Risk Disclosure Ordinance will come into force.
The FMA thus follows the recommendations of the Financial Market Stability Board (FMSG) to reduce and limit risks in the financing of residential real estate.
The Oesterreichische Nationalbank (OeNB) has been warning for some time about rising Real estate prices. Also the turnaround in interest rates that more and more borrowers could get into payment difficulties because they have taken on too much debt! Their income is too low for the future interest burden.
Another risk factor in the construction of single-family homes is the rising cost of construction, which can make financing plans obsolete. The aim of the new measures is to adequately contain default risks, to upgrade risk management in credit institutions and to avoid conflicts of interest.
Mortgages are getting even more difficult to obtain, and the latest round of regulations certainly does not help.
To qualify for an Austrian bank mortgage, your income must be in Euros and preferably taxed in Austria or EU.
This makes it difficult for overseas buyers, particularly the UK and USA.
Are there any answers?
Well, if you are not an EU citizen, then one could buy a holiday property cash. This is probably ok for cheap properties around €100,000 but not everyone has available funds to do this. So, many families buy a property together.
In Austria up to 4 people can be named on the ownership registration document. This creates a better purchase pot, particluarly if there are 4 people contributing. It also means each could release money from any UK or USA property, so that the family become cash buyers.
We have found that clients are now moving towards cheaper properties and raising funds in their own countries using their home country property as security for loans. This is probably one of the best methods, particularly when one’s own currency has a higher exchange rate against the Euro.
It is also easier if buying a property that has an existing income in Euros, such as an apartment house or guesthouse. The banks then are more helpful, as there is an existing income, but the property would need to show a few years consistant income, perhaps having been rented on Bookings com or similar holiday websites.
Currency exchange
Needing to have Euros for a property purchase or even just a holiday. It is cheaper to have your own Curremcy account. THis is just like a bank account, but you can buy various currencies at the best exchange rates, rather than the last minute rush to the high street currency exchanges or UK banks.
