Buying on credit in Mauritius
Do you dream of buying a heavenly property in Mauritius? A mortgage can help you make it happen. Find out all you need to know about loans in Mauritius.
Eligibility conditions for a mortgage in Mauritius
Eligibility criteria vary from bank to bank, but are generally as follows:
Age: usually between 18 and 65.
Residence: residents must provide proof of stable income and sufficient residence time. Non-residents must provide proof of regular financial transfers and foreign income.
Personal deposit: usually between 20% and 30% of the value of the property, but this is negotiable.
Loan term: up to 15 years for non-residents, which may vary depending on age and banking policy.
Debt ratio: the maximum debt ratio is 70%, although this may vary depending on the borrower's profile and the type of property. If your monthly income does not exceed 200,000 Mauritian rupees (EUR 4,050), you are not allowed to borrow up to 40%.
Ability to repay: you must be able to prove your ability to repay your loan. This will be assessed on the basis of your current income and expenses. If you already live in Mauritius, you will need to show proof of local employment and an adequate source of income to demonstrate your ability to meet the financial burden.
Financial guarantees: borrowing more than 50% of the capital needed to purchase a property may require financial guarantees, such as a mortgage on the property purchased.
Opening a bank account in Mauritius: You need to open a bank account to obtain a mortgage in Mauritius. What's more, a local bank account can be extremely practical for day-to-day transactions, especially if you're investing in rental property. It also avoids the often complex and costly international exchanges. It is entirely possible to set up an account in rupees and/or foreign currency, depending on the most appropriate tax deduction.
Interest rates: loans in rupees are mainly granted to Mauritian citizens and residents who receive their salaries in rupees by most banks or financing organisations. Interest rates on these loans are around 7%. However, these rates may be reduced to 4% in certain circumstances. Loan interest rates vary according to the offers made by financial institutions and banks, and may be fixed or variable depending on the term of the loan.
Selection criteria for obtaining a mortgage
Your debt ratio:
The first step in becoming a homeowner is to assess your borrowing capacity. This involves determining the budget that can be allocated to the property project. A maximum debt ratio of 40% is used to assess borrowing capacity if the borrower has a monthly salary of less than Rs 200,000. It does not exceed 50% if the gross monthly income exceeds Rs 200,000. However, each financial institution has its own rules for determining the income and expenses that are taken into account in this calculation. A bank may accept financing for one borrower but refuse it for another if it considers that the risk taken is too high.
Disposable income:
The assessment of a household's ability to borrow is based on "disposable income", which is a key indicator of standard of living. In other words, the amount left after deducting fixed costs from income.
The fixed costs are the expenses whose amount is always the same,these are: rent; housing costs such as insurance, water, electricity, telephone and internet charges, heating, etc.; tax; transport costs; and (consumer) credit repayments.
Granting a mortgage to a foreign national in Mauritius: specificities
Mauritian banks offer financing solutions tailored to foreign nationals wishing to invest in property. However, certain specific conditions apply.
Currency flexibility: Mauritian financial institutions are able to adjust their offers according to the currency in which your income is denominated. For example, if your salary is denominated in euros, the interest rate on your loan will generally be indexed to Euribor, a benchmark for the European money market. This flexibility allows you to benefit from competitive financing conditions.
Partial financing: Mauritian banks generally finance up to 70% of the value of the property. However, you will still have to pay ancillary costs such as notary fees and registration fees. It is therefore essential that you have sufficient funds of your own to complete the financing.
Mortgage guarantee: buying a property in an IRS, RES or PDS scheme offers banks additional security. These property developments are subject to specific guarantees, in particular the VEFA sale (vente en l'état futur d'achèvement), which guarantees the financing of the work and protects the buyer. This guarantee makes it much easier for foreign buyers to obtain a mortgage.
Buy with DECORDIER immobilier, your local agency in Grand Baie. Also in France in Evian-les-Bains and Thonon-les-Bains.
DECORDIER immobilier Grand Baie
Phone : +230 268 2828
E-mail : contact@decordier-immobilier.mu
Website : www.decordier-immobilier.mu