Purchasing your own home is undoubtedly one of the most important milestones of your life... yet, one of the most expensive endeavours.
In an effort to help you get through the gates of the real estate world, we asked Bank One to tell us more about eligibility for a home loan.
How is your eligibility assessed?
Financial institutions or banks use what is called the LTV (Loan to Value) ratio, which is the ratio between the amount of money borrowed and the estimated value of the property purchased or under construction. This is prescribed by the Bank of Mauritius to calculate the deposit required for the purchase of a property, which also affects the amount of repayment.
Local banks are required to ensure that the LTV ratio does not exceed 80% of the value of the residential property for those who are self-employed or contract workers and 100% for those in full-time employment.
Choosing the right bank
The island counts 12 financial institutions offering loans for housing, including construction, renovation, property purchase or refinancing.
All credit institutions have eligibility procedures to determine the amount of home loan you can qualify for, based on your ability to meet the minimum monthly repayment. This is itself based on a number of relevant personal and financial details and criteria, including:
• your personal income, expenses and existing debts;
• your credit history; and
• the amount of deposit you are able to provide, if required.
The current Mauritian legislation
Financial institutions must ensure that the DTI (debt-to-income ratio) of the potential borrower does not exceed 50%.
In this respect, Bank One strongly recommends that you are honest and realistic about how you can fit the repayment into your monthly budget.
Want to find out more about home loans?
Winner of the ’Mortgage Product of Year 2022’ title at the GRB Innovation Awards 2022, Bank One is the ideal partner to answer your questions when it comes to home loans.
Intended to assist Mauritians in their acquisition, construction or renovation projects, see Bank One’s white paper to find out more.
