Buying Guide

Somerset Mortgages was the first mortgage consultancy to start arranging mortgages in Mauritius. With many years of international experience, Somerset Mortgages provides an independent and comprehensive service to help you buy or re-mortgage your property in Mauritius. We work with all the Mauritius banks and a number of international investment banks. Working with so many banks allows us to offer you the best deal, whatever your circumstances.

We have a close working relationship with the banks in Mauritius and due to the volume of business that we introduce, we are regularly able to offer lower interest rates and fees than you would normally be offered.

Buying a property off-plan in Mauritius usually involves arranging an Escrow Account, Bank Guarantee, Mortgage, Life Insurance, Building & Contents Insurance and Foreign Exchange Transfers. We will arrange all of these for you, at a lower cost and quicker than you trying to arrange these for yourself.

What are the steps involved in getting a Mauritian Mortgage?

1. Find out how much you are eligible to borrow by completing our online quotation request form.

2. Instruct Somerset Mortgages to obtain an Agreement in Principle on your behalf.

3. Go to Mauritius and find a suitable property.

4. While in Mauritius, sign a sales or reservation agreement and transfer the deposit with Somerset FX to secure the property.

5. Send us a copy of the signed sales agreement, which we will submit to the lender.

6. Lender instructs valuation, if required.

7. Acceptance of life assurance by lender.

8. Lender issues a mortgage offer.

9. Somerset Mortgages will open a Mauritian bank account and arrange buildings insurance.

10. Transfer balance to the Notaire with Somerset FX.

11. Arrange monthly mortgage payments with Somerset FX Regular Payment Plan.

12. Completion.

What type of property can I get a mortgage on?

We can arrange mortgages for individuals or companies to buy main homes; second homes; rental or investment properties; off-plan properties and commercial properties. Equity release mortgages are available.

What currency will my mortgage be?

Mortgages are available in all major currencies, including Swiss Francs, US Dollars, UK Sterling, Euros and South African Rand's.

What is the maximum loan amount (LTV%)?

Depending on the valuation of the property, or purchase price, non-residents can borrow up to 80%. All mortgages are subject to income but some banks will also take rental income into consideration.

Lending Criteria

Lenders calculate financial commitments (loans and rent) including the requested mortgage, as a percentage of stable pre-tax income. As a general rule the ratio should not exceed 50%, but obviously this depends on the figures involved as the higher the income the higher the debt ratio can be. In fact, most lenders try to apply their rules with common sense and look at the actual amount of disposable income, not just the percentage.

What is the minimum loan amount?

The minimum loan amount that Somerset Mortgages will consider is €100,000.

How long is the term of the mortgage?

The mortgage term can be from 5 - 20 years.

Do I need life assurance?

Life assurance is mandatory with most of the banks, but not all. Somerset Mortgages can help you arrange life assurance at minimal cost.

Which mortgage types are available?

Both capital repayment and interest only mortgages are available for both purchase and equity release.

Interest rates

The interest rate will depend on the currency of the mortgage. For example, if a Euro mortgage was selected then the EURIBOR (European Interest Offered Rate) would apply, plus the bank's margin.

Buildings insurance

This must be in place before completion. Somerset Mortgages can provide you with a quote.

Bank account

You will be required to open a Mauritian bank account before completion. Somerset Mortgages can assist you with this at no additional cost, if required.

What timeframe is involved in securing the mortgage?

An Agreement in Principle can be obtained from a lender once all the requested documentation has been submitted. This takes approximately three working days. However, for loan amounts in excess of €750,000 this may take longer.

A minimum of eight weeks should be allowed from application to completion.

Organising payment of your Mauritian mortgage

Please be aware that missing a monthly mortgage payment may have serious consequences and we therefore strongly advise participation in the Somerset FX Regular Payment Plan. This service gives you peace of mind in the knowledge that your Mauritian mortgage repayments will be met automatically each month.

Completion

Mortgage funds will be released by the lender to your Notaire for completion of the purchase.

Fees and Taxes

Somerset Mortgages charges the following fees

• Mortgage & Bank Guarantee - a fee of 0.25% (min US$2,000) of the mortgage amount, payable on application to prepare, package, facilitate and courier your mortgage application.
• Bank Guarantee only - US$500
• Opening an Escrow Account - US$300 (No charge if we are also arranging the mortgage).
• SARB Applications (South African residents only) - TBA
• The estate agent commission will vary from 4% - 8%.

Somerset FX does not charge a fee or commission. The Notaire will provide you with a breakdown of fees payable once a sales agreement has been signed. The Bank's Arrangement Fee will generally be 0.5% to 2% for the mortgage and 0.5% to 2% for the bank guarantee. Where possible we will negotiate on your behalf to reduce this.