How to finance a property purchase in Greece?

Residential property prices in Greece have been steadily increasing since 2022, reaching a 2% on year increase for houses and a 4% rise for apartments by at the end of the third quarter of 2024.

Prices are expected to continue rising, because of the strong demand more than the available supply. A report by the University of Macedonia revealed that, fewer Greek buyers are interested in purchasing property, leaving room, creating an opportunity for foreign buyers and investors.

When buying property in Greece, you have several payment options:

• Cash
• A previous property sale
• A loan in your home country
• A mortgage in Greece
• My Home II

If you have sufficient funds, a cash transaction can simplify the purchase process in Greece. It has many advantages: reduces the need for loans, speeds up the purchase and  the power to negotiate a better price for the property.

The funds from selling your home in the UK or another country can be used for purchasing a property in Greece.

You may choose to take out a loan or mortgage in the UK from a bank that offers international borrowing. This may give you more favourable terms than applying for a Greek bank, especially if you are a new resident.

Financing through a Greek bank is also an option. Greek banks offer mortgages to both residents and non-residents, subject to the eligibility criteria. You should be prepared to submit proof of income, tax returns, and property valuation reports, which will be assessed in detail.

The type of mortgage (fixed or variable rate) will depend on your financial situation. If you are a non-resident, you may have to pay a higher interest rate than residents.

As when applying for credit in most countries, you will need to have a good credit record to demonstrate you are not a risk.

The « My Home II » (Spiti Mou II) program is a Greek government initiative intended to facilitate homeownership by offering low-interest or interest-free loans to purchase your first home. It is also available to foreigners who are residents of Greece, and begins on 15 January 2025.

• Applicants must be between 25 and 50 years old.
• Minimum annual income: €10,000.
• Maximum income limits are:
  – €20,000 for single individuals,
  – €28,000 for married or cohabiting couples, plus €4,000 for each child,
  – €31,000 for single-parent families, plus €5,000 for each additional child.

• Value must not exceed €250,000.
• Maximum size : 150 square metres.
• Built before 2007.

• Loans can be up to 90% of the property’s value, with a maximum amount of €190,000.
• Loan term ranges from 3 to 30 years, and early repayment is allowed without penalties.
• Families with three or more children, or those who become parents during the loan term, are eligible for a 50% interest subsidy.
• Collateral may be required up to 120% of the loan amount.

Greek banks do not generally offer 100% mortgages. Buyers are expected to contribute an agreed amount of the property’s value as a deposit, which could be the amount of down payment, depending on the negotiation.

Remember to allow for other purchase costs too, which include taxes, legal fees and registration charges.

The amount you can borrow in Greece depends on your financial situation and the bank’s policies. Typically, banks lend up to 70-80% of the property’s value. The lender will evaluate your income, credit history and existing debts before approving the loan amount.

While it’s not compulsory to have a bank account in Greece to purchase property, it is recommended. You will need one if you are applying for a Greek mortgage. Having a Greek bank account will make it easier to pay property-related bills, such as taxes (ENFIA), legal fees, and utility bills, all of which are more cost-effective when handled in local currency.

Buying a house in Greece is not overly complicated, but it does require an understanding of the specific legal and administrative steps. Iad Overseas consultant can guide you through the Greek property buying process, making it easier to find your dream home.

By understanding the financial and legal aspects of purchasing property in Greece, you can approach the process with confidence and reduce any potential risks. Whether opting for cash payment, a mortgage or combining your financial resources, thorough planning and professional guidance from a company like iad Overseas are essential.

If you’re considering buying property in Greece in 2025, we’d be thrilled to help you find your ideal home. At iad Overseas, we have extensive knowledge of the Greek real estate market and can guide you through every step of the process. Contact us to learn how we can support you in making your property purchase in Greece a smooth and successful experience.