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Mortgages in Monaco

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 8, 2023

Mortgages in Monaco

Monaco is a beautiful and luxurious place to live. It hosts the world-famous Monte Carlo Casino, some of the most fantastic architecture you’ll ever see, fabulous beaches, and one of the most booming property markets in the world.

In this article, we’ll cover everything that has to do with property finance and mortgages in Monaco. We’ll be explaining the tax benefits, Monaco property costs, purchase process, and LTV rates, among other pertinent topics.

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The situation in Monaco

Monaco is the embodiment of wealth and prosperity. It boasts luxury properties, and although a small city, it’s become globally popular and it’s a prime destination for the upper class. The mortgage system in Monaco is a lot like the French system, meaning you don’t have to be a citizen to buy Monaco property.

Unlike other countries, however, it’s not legislation that’s a barrier to entry for an overseas mortgage but the high property prices. Property in Monaco isn’t quite affordable to everyone, with rising property prices affecting residents and non-residents.

Monaco’s rising property prices

If you’re looking to make a property purchase in Monaco, it won’t be cheap, and actually, it’s one of the most expensive in the world. You can expect to pay somewhere around €50,000 per square metre (£43,790).

Consider also how prices rose 18% between 2017 and 2018. This means that a property that you bought in Monaco for €22 million (£19.2 million) will, after just a year, be worth €25,960,000 (£22.7 million).

This, paired with the fact that Monaco is a seller’s market, means that attempting to buy a home in Monaco is no easy feat. It’s very competitive: so make sure to have capital at the ready or at least assets you can use as collateral.

Typical Monaco real estate prices range around €5 million (£4.3 million) but can average as much as €13.5 million (£11.8 million) if it’s a new build. Smaller apartments can cost you a bit less at around €2,000,000 (£1.7 million). You can also expect that properties in locations such as Monte Carlo and Larvotto will be much higher. Currently, all currencies are accepted by the Monaco lending market.

You won’t have much time to ponder your ideal property. If you see one you like, make sure you act decisively. Our team of professionals can also help you with this. Just give us a call on 0808 301 9509. You can also contact us by filling out this form.

Make sure to give our mortgage affordability calculator a try to see if you can afford your desired Monaco real estate.

A tax-haven

Monaco is something of a tax haven. Many wealthy individuals move to the city for this very reason. The House of Grimaldi built the Monaco Carlo Casino, which was so profitable that taxes were abolished.

Because of this, the city presents immense investment opportunities for the upper class. Residents of Monaco don’t have to pay any capital gains tax when they sell or purchase a property. There’s also no inheritance tax, which makes it an excellent option for families.

That said, if you keep your UK residency, you will still be subject to UK tax regulations and have to pay UK property and income tax on any rental income and the sale of overseas property.

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Getting Monaco mortgages

Getting a mortgage is an exciting proposition, especially in a city like Monaco. However, it’s essential first to understand the process and conditions you’ll need to fulfil to be eligible. We’ve compiled all this for you below:

The process of getting Monaco mortgages

Getting a mortgage in Monaco is a little more nuanced than in some other countries. But don’t worry. We’ll take you through the lending process, step-by-step:

  1. You’ll always start by signing a Compromis de Vente. This is a written contract of sale that sets the main terms between the seller and buyer.
  2. Next, you’ll have to pay between five and ten per cent of the property’s price as a show of intention.
  3. Because of the relatively low LTV offers, you’ll have to pay anywhere from 30% to 50% of the property price as an instalment.
  4. Next, after putting together all the necessary documentation and once you’ve received your mortgage, you’ll end with a purchase contract.

We know some may be concerned about the language barrier being a problem, however it is not an issue. Most companies in Monaco have staff that speak English, among other languages, fluently.

Assets Under Management (AUM)

While we did say that usually, you’d have to put down quite an initial payment, it is possible to get mortgages of even up to 85% if you have assets to use as collateral. This is known as Assets Under Management.

Conditions for getting a mortgage

You’ll be able to get a mortgage if you’re planning to buy property to rent, you’re looking to build a house, you’d like to do a significant renovation, you want to build a home to live in, or you’re contemplating buying a holiday home.

However, you’ll need to have certain aspects in place. These include:

  • Proof of funds.
  • Documentation regarding your work and family status.
  • If you’re building a property, an estimation of the cost.
  • A stable source of income (and only one source will be considered, not several).
  • And anything else as specifically requested.

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Additional fees

On top of the purchase price, buyers of Monaco properties must be aware that there are quite a few additional fees involved with purchasing a property. Particularly if you’re a first-time buyer, you may not know these already. Typically you can expect notary fees, registration fees, and stamp fees (accounting for around 6% of the property price).

You might also have to pay estate agent fees, which vary depending on the sale.


Mortgage types in Monaco

Usually, a mortgage will be five years, which can then be increased by another five years, and so on, at a limit of 30 years. With this in mind, finding a mortgage that works for you financially is crucial.

Interest-only mortgages

These are mortgages where the borrower has to pay interest solely for a period of time, after which they’ll have to pay a specific lump sum to cover the loan. The disadvantage of these is that the terms are usually for only a short-term basis of up to 7 years.

Currently, the interest rate is relatively low, ranging between 1.2%-1.5%, making interest-only mortgages a pretty good choice.

Fixed-rate mortgages

A fixed-rate mortgage is a loan where the interest rate remains the same throughout the entire mortgage term. This is beneficial to protect buyers against fluctuating interest rates, and it’s a great and stable way to ensure that you know what you need to pay each month. However, you do lose the benefit of possibly decreasing interest prices.

Variable rate mortgages

Variable rate mortgages are better for those who are willing to take a gamble on the state of the market. The interest rate you pay will fluctuate depending on the lender. This can be a much better choice in times when interest rates remain low.

Tracker mortgages

Tracker mortgages are similar to variable rate mortgages, except that the prime market rate determines what buyers will pay. Variable rates change based on the lender’s decision, but tracker mortgages stay on course with the market’s fluctuations.

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Can you get a mortgage in Monaco?

Yes, you can get a mortgage in Monaco. You will, however, have to make a relatively sizeable initial payment of 30% to 50% of the property value.

Can foreigners buy property in Monaco?

International buyers can purchase properties in Monaco. However, property prices are pretty high, and the market is highly competitive.

Is Monaco good for real estate?

Monaco is a fantastic destination for real estate. Because of the rising property prices, low-interest rates, and freedom from capital gains tax, local buyers are swooping in to purchase properties. Non-residents may be subject to tax in their country.

What is the average cost of a house in Monaco?

The average cost to purchase property in Monaco depends on the area you choose to buy in. While it can cost €5 million (£4.4 million) on average in some areas, you’re looking at €13.5 million (£11.8 million) or more in others. Additionally, typically a small studio apartment will cost €1.75 million (£1.5 million) to €3 million (£2.6 million).


Contact Loan Corp for professional mortgage advice

We’d love to help you get an incredible home in this extraordinary city. You can contact our financial team at 0808 301 9509 or get a quote from us by filling out this contact us form.

We aim to get back to all our clients within 2 hours from Monday to Friday during working hours, and within 4 hours over the weekend and bank holidays.

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