Getting a Loan to Purchase Property in Morocco

Purchasing property in Morocco is an exciting prospect, whether you’re buying a vacation home, a rental property, or a place to call home permanently. For many buyers, securing a mortgage or loan is an essential part of the process. This blog post will guide you through the key considerations and steps involved in getting a loan to purchase property in Morocco.

1. Understanding the Basics
In Morocco, both residents and non-residents can apply for a mortgage to finance their property purchase. Moroccan banks are generally willing to provide financing to foreign buyers, although the terms and conditions may vary. The maximum loan amount is typically 70% of the property’s value, meaning buyers should expect to provide a down payment of at least 30%. The repayment period usually ranges from 15 to 25 years, depending on the lender and the borrower’s financial profile.

2. Eligibility Requirements
To be eligible for a mortgage in Morocco, you will need to meet specific requirements. These generally include proof of income, bank statements, and documentation verifying your identity. Foreign buyers are required to provide additional documents, such as proof of residence in their home country and a valid passport. Banks will assess your ability to repay the loan by evaluating your financial stability, income sources, and credit history.

3. Choosing the Right Bank
It’s important to compare mortgage options from different banks to find the best terms. Moroccan banks such as Attijariwafa Bank, Banque Populaire, and BMCE Bank offer a range of mortgage products for foreign buyers. Each bank has its own eligibility criteria, interest rates, and repayment options. Working with a local mortgage broker can help you navigate the options and choose the right bank for your needs.

4. Interest Rates and Loan Terms
Interest rates for mortgages in Morocco can be either fixed or variable. Fixed interest rates provide the security of knowing exactly what your repayments will be throughout the loan period, while variable rates may fluctuate based on market conditions. Generally, interest rates for foreign buyers are slightly higher compared to those offered to Moroccan residents. It’s essential to understand the terms and conditions of the loan, including any penalties for early repayment.

5. The Application Process
The mortgage application process typically involves several steps, including pre-approval, property valuation, and final approval. Pre-approval gives you an idea of how much you can borrow and demonstrates to sellers that you are a serious buyer. Once you have chosen a property, the bank will conduct a valuation to determine its market value. The final approval of the loan will depend on the valuation, as well as the bank’s assessment of your financial situation.

6. Currency Considerations
Foreign buyers should also consider the impact of currency exchange rates on their mortgage repayments. Since Moroccan mortgages are usually issued in Moroccan Dirhams (MAD), fluctuations in the exchange rate could affect the amount you need to repay each month if your income is in a different currency. Some banks offer foreign currency mortgages, which can help mitigate this risk, but it’s essential to fully understand the implications.

7. Additional Costs
When taking out a mortgage, there are additional costs to consider, such as mortgage insurance, notary fees, and administrative fees charged by the bank. Mortgage insurance is mandatory in Morocco and protects the bank in case of default. Notary fees and administrative fees can add up to a few percentage points of the loan amount, so it’s important to budget for these costs when planning your purchase.

8. Benefits of Getting a Mortgage in Morocco
Getting a mortgage in Morocco can provide several advantages. It allows buyers to leverage their investment by only paying a portion of the property's value upfront. It can also be beneficial for foreign buyers looking to maintain liquidity or diversify their assets. Additionally, financing a property purchase with a Moroccan mortgage can make the buying process smoother, as it demonstrates to sellers and notaries that you have the backing of a local financial institution.

Securing a mortgage in Morocco is a viable option for both residents and non-residents looking to purchase property. By understanding the eligibility requirements, choosing the right bank, and being aware of the associated costs, you can navigate the process confidently. At Hawazine Property Marrakech, we assist our clients in finding the right financing options and provide guidance throughout the buying process to make your property purchase as seamless as possible.