Austrian Property Mortgages

When you are buying a tourist rental property in Austria, you can expect to borrow around 50-60% of the value, depending on certain aspects. The bank will consider both the property's value and the potential rental income it can generate.

This allows you to leverage the property's income-generating potential to secure financing, making it relatively feasible to obtain financing for such ski properties. However, it's advisable to consult with financial advisors or mortgage specialists to accurately determine your specific borrowing ability and explore the best financing options available to you.

Yes, non-residents can apply for a mortgage in Austria.

The mortgages available in Austria include three different types of mortgages, all with their own features and advantages for you to consider:

1. Fixed-Rate Mortgages: Fixed-rate mortgages are a popular choice for borrowers seeking stability and predictability in their monthly payments. With this type of mortgage, the interest rate remains constant throughout the agreed term of the loan, which typically lasts for 10, 15, or 20 years. This means that regardless of fluctuations in the broader interest rate market, your monthly payments remain consistent, making it easier to budget and plan for the future. Fixed-rate mortgages provide borrowers with a sense of financial security, as they know exactly how much they will pay each month. These mortgages are particularly suitable in a low-interest-rate environment, allowing borrowers to lock in favourable rates for an extended period.

2. Adjustable-Rate Mortgages (Variable-Rate Mortgages): Adjustable-rate mortgages, also known as variable-rate mortgages, offer a different approach to interest rates. In this type of mortgage, the interest rate is tied to a reference index, such as the Euribor (Euro Interbank Offered Rate). The rate can change periodically, usually on an annual basis. The advantage of adjustable-rate mortgages is that they often start with lower initial interest rates compared to fixed-rate mortgages. However, the interest rate can fluctuate over time, potentially leading to higher monthly payments if market rates rise. Borrowers who are comfortable with some level of interest rate uncertainty or who anticipate lower interest rates in the future may find adjustable-rate mortgages appealing.

3. Mortgage Combination (Two-Loan Mortgages): The mortgage combination option merges two different mortgage loans into a single package. One part of the loan is typically a fixed-rate mortgage, while the other is an adjustable-rate mortgage. This option allows borrowers to benefit from both the stability of fixed payments and the potential for lower initial rates offered by adjustable-rate mortgages. This type of mortgage provides flexibility and diversification in managing interest rate risk.

It's important to note that Austrian mortgages are structured as full repayment mortgages, meaning each payment covers both the interest and principal repayment. Unlike interest-only mortgages, where only the interest is paid during the loan term, Austrian mortgages ensure that the loan is fully repaid by the end of the term. This approach allows borrowers to gradually build equity in their property.

Yes, non-EU citizens can obtain an Austrian mortgage, but you often need a foreign purchase permit, and banks may have tighter requirements for lending.