Very often, the purchase of a property in Mauritius requires financing through a home loan. Targeting both Mauritians and expatriates, a large variety of banks and financial institutions in the island offers personalized solutions concerning various types of real estate projects.
Also called a mortgage loan, a real estate loan is a loan granted by a bank, a mortgage company or a financial institution for the purchase of a property, the construction and renovation of a house. Obtaining a mortgage loan requires a case study of the borrower by the financial institution. Most of the Mauritian banks or credit card companies offer loans in Mauritian rupees to Mauritians and residents whose salaries are in Mauritian rupees, with interest rates fluctuating around 7 %.
Mortgage lenders are concerned by the capacity of the borrower to repay the loan. To determine whether you are eligible for a real estate loan, they will take account of your credit history, your gross monthly income and how much money you will be able to accumulate for a down payment. The real estate lenders will primarily want to know about your ability to repay the loan. In Mauritius, in the field of real estate loans, the maximum reimbursement shall not exceed 40% of the monthly remuneration of the borrower if his salary is less than 200 000 rupees per month.
Concerning foreigners, the banks or financial institutions usually adapt their offer to the national currency of the borrower. For example, if the currency is the euro, the rate will be based on the Euribor, one of the main reference rates of the monetary market for the euro area. The banks will fund up to 70 % of the property, excluding notary fees and registration fees. It is much easier for expatriates to obtain financing from local banks (financial institutions) compared to those in their country of origin due to the fact that the banks of Mauritius are more likely to take their IRS or RES units as warranty, especially as that these units are sold under the VEFA (Vente en état futur d’achèvement), providing the banks a “garantie bancaire en fin d’achèvement”. In other words, the IRS/RES units provide banks with a warranty regarding completion of the residence, when the property is still under construction.