Mortgages in
Italy
A mortgage in Italy for non-residents usually covers 50% to 60% of the property’s value. Here’s what to expect on rates, buying costs and private bank options in 2026.
Mortgages in Italy for Non-Residents: A 2026 Guide for International and UHNW Buyers
A mortgage in Italy for non-residents is achievable, but Italian banks lend more cautiously to foreign buyers than to residents. Most retail lenders cap non-resident borrowing at 50% to 60% of the property’s value, against up to 80% for residents. Private banks can go further, usually where the borrower also places assets with them.
From palazzi in Florence and lakefront villas on Lake Como to apartments in Milan and estates in Tuscany, luxury property in Italy continues to draw international buyers. Financing it means working within a conservative banking system, a tax regime that rewards early planning, and lenders that expect paperwork in a very specific form.
Hectocorn is an independent debt adviser, not a lender. We arrange mortgages, private bank facilities, Lombard loans and bridging finance for international and UHNW clients buying in Italy, and we compare every option on its total cost, not just the headline rate.
Italian Mortgage Rates and Lending Terms in 2026
Italian mortgages are priced as a margin over Euribor for variable-rate loans, or over euro swap rates (Eurirs) for fixed-rate loans. Both have risen this year. The European Central Bank raised its deposit rate to 2.25% in June 2026, its first increase in nearly three years, and again to 2.50% in September.
According to the Italian Banking Association (ABI), the average rate on new home-purchase mortgages was 3.61% in September 2026, up from 3.55% in August and 3.25% a year earlier. These figures are for resident borrowers. For non-residents, pricing depends on the lender, the size of the loan and whether you bring assets to the bank, so quotes vary more widely.
Financing parameter | Market reference (October 2026) | Private banking route |
Average new mortgage rate | 3.61% (ABI, September 2026) | Priced case by case, often better where assets are placed with the bank |
Benchmarks | 3-month Euribor 2.64%, 10-year swap rate 3.53% (September 2026) | Same benchmarks, with the margin negotiated |
Maximum loan to value | Up to 80% for residents, typically 50% to 60% for non-residents | Up to around 70%, usually with assets under management |
Term and age | 5 to 30 years, repaid by age 75 | Interest-only and bespoke terms available |
Affordability | Repayments of around 30% to 35% of net income | Assessed on overall wealth as well as income |
Valuation | Lower of the price and the bank’s valuation (perizia) | Same |
Market insight: the rates above are averages. On a prime purchase, the structure of the loan usually matters more to the total cost than a few basis points on the margin.
Can Non-Residents Get a Mortgage in Italy?
Yes. Italian banks lend to buyers from the UK, US, the Gulf and elsewhere, but expect a larger deposit and more documentation than from a resident. Plan on putting in 40% to 50% of the price yourself on a retail mortgage. Our guide to maximising loan to value explains how additional security can reduce that.
There is also a legal condition to check. Non-EU nationals without an Italian residence permit can buy only if their home country gives Italian citizens the same right, known as the reciprocity condition. UK and US buyers purchase in Italy regularly, but there is no official list of countries, and the notary checks this before completion, so it is worth confirming early. EU citizens and holders of a valid Italian residence permit are not affected.
What Italian lenders will ask for
- Codice fiscale. An Italian tax code, needed before you sign a purchase proposal or mortgage. UK residents can apply through the Italian Consulate at no cost.
- The bank lends against the lower of the agreed price and its own valuation. If the valuation comes in low, the loan shrinks with it.
- Proof of income. Usually two to three years of tax returns, payslips or audited accounts, and six to twelve months of bank statements.
- Documents not in Italian need certified translations, and some must also be notarised.
- Most banks want the mortgage repaid by the time you turn 75.
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Retail branches work from a fixed template. If your income comes from trust distributions, an investment portfolio or company profits, a private bank is usually the better route.
What Buying Property in Italy Actually Costs
Taxes on an Italian purchase depend on who you buy from and whether the property will be your main home. Because the first-home relief requires you to become resident in the comune within 18 months, most non-resident buyers pay the second-home rates below.
Cost | Second home | First home (resident within 18 months) |
Registration tax, buying from a private seller | 9% (minimum €1,000), plus €50 mortgage tax and €50 cadastral tax | 2%, plus €50 and €50 |
VAT, buying from a developer | 10%, or 22% for luxury categories A/1, A/8 and A/9, plus €200 each for registration, mortgage and cadastral tax | 4%, plus €200, €200 and €200 |
Substitute tax on the mortgage | 2% of the loan amount | 0.25% of the loan amount |
IMU (annual property tax) | 0.86% base rate, up to 1.06% depending on the comune, charged on the cadastral value | Exempt, except luxury categories A/1, A/8 and A/9 |
Use the cadastral value
When you buy from a private seller as a private individual, you can ask the notary to charge registration tax on the property’s cadastral value instead of the price. This is known as the prezzo-valore rule. For a second home, the cadastral value is the registered cadastral income multiplied by 126, and it is usually far below market value. On a prime property, the saving can be substantial. Ask for the cadastral record (visura catastale) before you agree a price.
Moving to Italy: the flat tax
For clients relocating rather than buying a second home, Italy offers a flat tax for new residents: a fixed annual payment on foreign income instead of ordinary Italian tax. For people becoming resident from 1 January 2026, it is €300,000 a year, plus €50,000 for each family member included, up from €200,000 and €25,000 previously. If a move is part of the plan, the purchase and the tax election should be planned together.
Alternatives to a Standard Italian Mortgage
A retail Italian mortgage can take two months or more from application to completion, which is a real risk on a competitive purchase. These structures can be faster and, in some cases, cheaper.
- Lombard loans. Borrowing against a portfolio of shares or bonds lets you buy the Italian property outright. With no mortgage registered in Italy, the 2% substitute tax generally does not apply, and you complete on a cash buyer’s timetable. The tax position depends on where and how the loan is arranged, so confirm it with your tax adviser.
- Equity release on property you already own. Refinancing a home in London, elsewhere in Europe or in the UAE can raise the funds to buy in Italy as a cash buyer.
- Bridging finance. Short-term funding to secure a property quickly, refinanced later with a private bank or longer-term lender.
More on each: Lombard loans | bridging finance | international mortgages
What This Means for Buyers Right Now
- Plan for 50% to 60% loan to value as a non-resident. Higher leverage usually means a private bank and assets placed with it.
- The ECB has raised rates twice this year, in June and September. Quotes from 2024 or 2025 no longer apply.
- Get the cadastral value early. On a private sale it can cut the registration tax sharply.
- Compare an Italian mortgage and a Lombard loan on total cost, including the 2% substitute tax on a second home.
- Confirm the reciprocity position if you are a non-EU national without an Italian residence permit.
- Apply for your codice fiscale before signing anything. It is a common and avoidable cause of delay.
Structuring Italian Property Debt with Hectocorn
Our network covers private banks, specialist lenders and debt funds that can lend against non-standard ownership structures, offshore companies and income in several currencies.
Whether you are buying a villa on Lake Como, an apartment in Milan or raising funds against an existing portfolio, we structure the finance around your wider wealth plan. We do the same for buyers in France and Monaco.
Get in touch to discuss your finance options
Speak to our team about financing a property in Italy.
 +44 (0) 203 154 3934 | info@hectocorngroup.com
Contact UsFrequently Asked Questions
Yes. Italian banks lend to non-residents, usually up to 50% to 60% of the property’s value, subject to income checks and an affordability test. Non-EU nationals without an Italian residence permit should also check the reciprocity condition before going ahead.
As a non-resident, plan for 40% to 50% of the price, plus buying costs. Private banks may lend up to around 70% where you also place assets with them.
The average rate on new home-purchase mortgages was 3.61% in September 2026, according to the Italian Banking Association. Rates are set as a margin over Euribor (variable) or swap rates (fixed), and both have risen since the ECB increased rates in June and September 2026. Non-resident pricing varies by lender, so get a current quote.
A passport, an Italian tax code (codice fiscale), proof of address, two to three years of tax returns or accounts, and six to twelve months of bank statements. Documents not in Italian need certified translations.
Around eight to ten weeks for a straightforward application, and often longer for non-residents. A Lombard loan or other facility secured outside Italy can be much quicker, because no Italian mortgage needs to be registered.
It can be. An Italian mortgage on a second home carries a 2% substitute tax on the loan amount. A loan secured on investments, with no mortgage registered in Italy, generally avoids it. Compare the two on total cost, including the margin on each, and confirm the tax treatment with an adviser.
Italian retail banks offer one product. We compare private banks, specialist lenders and asset-backed options for your circumstances, and handle the structuring and paperwork with your lawyer and notary.
Mortgages on property outside the UK are not regulated by the Financial Conduct Authority. Hectocorn does not give tax or legal advice. Tax rates are correct as of October 2026 and may change.
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