Italian Mortgage (Mutuo) for Non-Resident Buyers

Intesa Sanpaolo, UniCredit, BNL, Banco BPM and Mediolanum are among the lenders offering a mutuo. Residents are favoured, but non-residents with income in the EU, the UK or the US can qualify after a fuller review. Banks like a local account, and brokers (mediatori creditizi) can approach several lenders for you.

All buyers must get a codice fiscale tax code, which can be obtained at an Italian consulate or the Agenzia delle Entrate.

Citizens from some countries are subject to reciprocity conditions for buying property, though in practice this rarely blocks a purchase.

Italian mortgages come as fixed or variable, tied to Euribor or the eurozone swap rate. In recent years, fixed rates have commonly landed around 3% to 4.5%, though this shifts. Non-residents typically borrow 50% to 60% of the lower of price and valuation, with terms up to 25 or 30 years.

Lenders cap payments at around a third of net income. Use the mortgage calculator to test it.

Italian banks require translated and sometimes apostilled documents.

Italian purchases follow a compromesso then rogito sequence.

1. Obtain a codice fiscale.
2. Make an offer (proposta) with a deposit.
3. Sign the compromesso (preliminary contract).
4. Bank valuation and loan approval.
5. Sign the rogito before a notary.
6. Register the deed and pay taxes.

Some buyers use equity from home. Others seek bargains such as renovation projects or cheap village homes. See apartments, villas, land and studios.

Taxes depend on whether the property is a primary home.

Many Italian homes have unregistered alterations. A geometra should compare the planimetria with the actual layout.

Elective residence and investor visas have different requirements.

Rental income is taxable, with a flat tax option (cedolare secca).

Many Italian borrowers take a fixed rate for peace of mind, even when the opening rate is higher. A variable loan follows Euribor and can be cheaper at first, though payments rise if rates do. Some banks offer a variable rate with a cap, and a few allow switching later through a surroga (transfer of the mortgage to another bank without penalty), which is a useful right if better offers appear. Always ask for the TAEG, the effective annual rate, to compare products fairly.

Prices vary widely: Milan, Rome and Florence are expensive, while the south, Sicily, Calabria and Puglia offer lower entry costs and many renovation projects. Lake Como and Tuscany attract international buyers, who often pay in cash. Lending outside main cities can be slow because valuers are fewer, so allow extra time. Small village homes may be cheap but need structural work, which banks rarely finance.

Owners of second homes pay IMU, a municipal tax, and TARI for waste, and pay the TASI-style charges inside IMU in most places. Non-residents who rent out property pay income tax on rent, though the flat cedolare secca regime is usually cheaper. If you plan to move, check Italy's regimes for new residents and the 7% flat tax for retirees in some southern municipalities, subject to current rules and eligibility.

Some foreigners buy through an Italian or foreign company to hold rental property, while others buy jointly with a partner. Company ownership changes tax treatment, and banks usually ask for directors' guarantees. Joint owners should agree what happens if one wants to sell, and a lawyer can add that to the deed. In inheritance, Italian forced heirship rules can override your will unless you prepare planning in advance, so ask a notary about succession before you buy.

The deposit at the proposta stage is usually returned if the seller refuses, but kept by the seller if you withdraw without cause. At the compromesso, a confirmatory deposit (caparra confirmatoria) of around 10% is typical, and you lose it if you default, while the seller must return double if they default. Make the contract conditional on mortgage approval so that a refusal does not cost you the deposit.

See the Italy consultation guide and the market analysis. Bargains: under 100k.