A non-resident can borrow against an Italian property at 50 to 60 per cent of its appraised value — not the 70 to 80 per cent typical in the UK or Germany. That gap defines the equity calculation before any other number matters, and the right time to establish it is before the offer, not after the appraisal arrives.
What LTV do non-residents get?
The bank lends on the appraised value set by its own surveyor (perito), not on the agreed purchase price. For Tuscan villas and country houses the appraised figure routinely comes in below the price, because the appraisal measures the building and plot rather than the setting and prestige the price reflects. The practical effect: equity covers both the bank’s shortfall from 100 per cent and the gap between price and appraisal.
| Profile | LTV | Max. term | Notes |
|---|---|---|---|
| Resident with Italian income | up to 80% | 25-30 years | Standard case |
| Resident with foreign income | 60-70% | 25-30 years | Stricter income verification |
| Non-resident | 50-60% | Max. 25-30 years | End age 75-80; 70% LTV rare |
Maximum term is 25 to 30 years, but the end-age limit cuts it in practice: most banks stop at 75 to 80. A buyer who is 55 at completion gets at most 20 years, which raises the monthly payment considerably.
Rate types and what they cost
Three models are standard. A fixed rate (tasso fisso) runs against a long-term index; monthly payments are steady for the full term, which suits a buyer who holds the property for years without wanting to track rate movements. A variable rate (tasso variabile) tracks the Euribor; lower to start, it moves over time. A capped variable sets a ceiling on where the rate can go, at a small spread above the standard variable.
| Rate type | Rate | Reference | Best suited to |
|---|---|---|---|
| Fixed (tasso fisso) | 3.5-4.5% | 20-year IRS | Long hold, second home |
| Variable (tasso variabile) | Euribor 3M + 1.8-2.5% | Euribor 3M | Shorter term, rate-comfortable |
| Capped variable | Euribor + 2.0-2.8% | Cap at 5-6% | Ceiling comfort, some flexibility |
When comparing offers from different lenders, use the all-in rate (TAEG, tasso annuo effettivo globale), which includes the interest, processing fee, appraisal and insurance. The nominal rate (TAN) shows only the interest and does not compare like for like.
Which banks finance non-residents?
Intesa Sanpaolo has the widest non-resident experience and is the most consistent starting point. Crédit Agricole Italia serves buyers with foreign income, including German-speaking clients. UniCredit and BNL BNP Paribas are also active with non-residents. Smaller cooperative banks often offer sharper rates but handle fewer non-resident files and process them more slowly.
The willingness varies branch by branch within the same institution. A buyer can be turned down by three branches of one bank and approved at the fourth. The buyer advisory service covers routing buyers to branches that regularly handle foreign income files.
Buyers from Germany or Austria with euro income have the most straightforward documentation path: no currency risk and no translation premium. The detail most overlook is that existing mortgages at home count in the Italian bank’s affordability calculation. A current home loan reduces the headroom for the Italian mortgage, because the combined monthly obligations must stay within roughly one third of net income. Some German banks offer Italian property financing through their international desks; the process runs in German, though the rates are not always better than an Italian lender’s.
Swiss franc buyers: added step
Buyers earning in Swiss francs carry an extra layer, because the bank applies a currency risk deduction of 10 to 20 per cent to CHF income when converting to euros for the affordability check. In practice this means a tighter LTV, often 40 to 50 per cent rather than 50 to 60 per cent, more documentation and longer processing times.
An alternative is borrowing against Swiss assets at home: a securities-backed credit line (Lombardkredit), at around SARON plus 1.0 to 1.5 per cent on 50 to 60 per cent of the portfolio value, with funds available in one to two weeks. This route avoids the Italian mortgage process entirely and carries no mortgage tax in Italy. The constraint is that the pledged assets are tied up and unavailable for other investments.
What documents does the Italian bank need?
The file is longer than at home, and it must be complete before the bank moves. Certified translations add one to three weeks, and bank statements must run without any gap.
| Document | Detail | Key note |
|---|---|---|
| Passport / ID | Valid, certified copy | Consular certification may be required |
| Tax number (codice fiscale) | Italian tax number | Prerequisite for everything |
| Certificate of residence | Proof of address | Registration confirmation |
| Income documentation | Last 2-3 years' tax returns, pay slips | Certified translation into Italian or English |
| Bank statements | 6-12 months, no gaps | Source of funds must be traceable |
| Preliminary contract | Signed compromesso | Bank reviews before disbursement |
| Land registry extract | Charges on the property | Notary pulls this |
| Appraisal | Valuation by bank-appointed surveyor | Bank chooses the appraiser, buyer pays |
Self-employed buyers submit three years of accounts, tax assessments and business bank statements. Banks often lend to the self-employed at a lower LTV than to employees, and the file takes two to four weeks longer to assess. Pension income is accepted, but the end-age limit bites harder: a 65-year-old with an end age of 75 gets at most ten years.
What does the financing cost?
The mortgage carries costs beyond the purchase. A mortgage tax (imposta sostitutiva) applies at 0.25 per cent of the loan for a primary residence and 2 per cent for a second home. On a loan of 750,000 EUR for a second home, that is 15,000 EUR; a figure worth placing in the budget early. The mortgage registration at the notary is a separate deed, adding roughly 2,000 to 4,000 EUR. The bank’s appraiser costs 300 to 800 EUR. Lender arrangement fees run 0.5 to 1 per cent and are negotiable. Fire insurance is compulsory for the full loan term.
How the mortgage tax sits alongside the agent commission and purchase taxes is set out in taxes when buying property in Italy and estate agent commission in Italy.
Approval timing and sequencing
From a complete submission, approval takes four to eight weeks. The bank runs a credit check first, then commissions its own appraisal (two to four weeks), then issues the formal decision (delibera). In practice the process often stretches to eight to twelve weeks when documents need to be resubmitted or translated.
The sensible sequence: request a preliminary assessment from the bank before making an offer (free, one to two weeks); make the offer with a financing condition included; sign the preliminary contract with 90 to 120 days through to completion; submit the full file immediately after signing. A preliminary contract with 60 days to completion gives a bank nothing to work with.
Buying an unrenovated property and financing the works separately is possible, but the bank funds renovation in stages tied to construction progress. For non-residents that tranche structure is slower to manage than a straightforward purchase loan. Two separate financings, or funding the works at home, is usually the more workable path. The renovation guide for Tuscany covers costs and timelines.
Early repayment
Italian law removed prepayment penalties on residential mortgages in 2007. You can repay in part or in full at any time, without a charge. Buyers who sell a property at home, receive an inheritance or want to apply a bonus to the balance are free to do so.
FAQ
How long does mortgage approval take for non-residents?
Four to eight weeks from a complete submission; eight to twelve weeks is common in practice because documents need supplementing or translating. The preliminary contract should give the bank 90 to 120 days through to completion. Missing this sequence is one of the more costly errors buyers make in Italy, covered in 7 mistakes foreign buyers make in Italy.
Can I finance through my home bank instead?
Yes, where your home bank lends against home-country assets. This is standard practice in Switzerland and avoids the Italian mortgage process and the 2 per cent mortgage tax. The assets behind the loan are tied up for its duration.
Can non-residents get primary-residence rates?
Only by moving your registered address to the property’s municipality within 18 months of the notarial deed. That means an actual change of residence recorded in the local register. Without it, the second-home rate applies: 2 per cent mortgage tax instead of 0.25 per cent.
What if the appraisal is below the purchase price?
The LTV runs on the appraised value. When the appraisal comes in below the price (as it routinely does for Tuscan villas), the equity requirement grows by the gap. Knowing the likely appraisal range before the offer lets you size the cash correctly.
Is renovation financing available?
In principle yes, but the bank pays in tranches linked to documented construction progress. For a non-resident, combining purchase and renovation in one loan is uncommon and slower than two separate financings. Financing the renovation against home-country assets is usually the tidier route.
Andrej Avi is an estate agent in Tuscany. Buying guidance · Properties · About Andrej
Related reading: Taxes when buying property in Italy · Buying property in Italy: the complete guide
As of July 2026. General information, not legal or tax advice.
