Europeans, especially French citizens often complain about their situation but are they aware that since years, they do benefit from exceptional financing opportunities in Mauritius?
Imagine for a second that if it was possible in Mauritius to borrow from financing institutions on a long-term basis like in France (30 years) and Spain (50 years) without initial contribution? If on top of it, could add this loan to all your ancillary costs including mortgage fees, notary fees, other unpredictable expenses in case of an off-plan buying (VEFA). If ever the rate of interest offered by your bank is around 5. 95% (insurance inclusive).
This being said, we understand why most Europeans are reluctant to take loans in Mauritius, with interest rates superior than 7% while in addition being variable.
The best solution if we wish to attract more clients towards Mauritian banks is to look for an institution which may propose loans in Euros at a fixed interest rate bearing a minimum amount of initial contribution.
La Banque des Mascareignes offers an interesting solution: a loan in euros at a fixed rate of about 5.95% together with a pegging of 50% of the borrowed amount via invested in the institution and pledged for the duration of the loan. The bank will mortgage the property which is being financed. By respecting this schema, the bank provides 100% financed loans.
On loans amounting several millions of rupees often spread over 18 months, this represents a lot of money. If the client targets return on investment by way of rental, this option allows him to reimburse his loan upon delivery of his property.
For the clients, the outcome is numerous, it is a win-win situation. The client spends less money thanks to preferential rates and total visibility on his loan instalments. Furthermore, once the loan totally reimbursed, the client becomes owner of his villa is granted the full enjoyment of his invested capital. These attractive financing solutions are facilitating the sales of IRS and RES units.
This remains very attractive also for those who receive their income in Euros, as opposed to those whose revenues are in Rupees. The true question that remains: what about the future? We all hope that these kinds of incentives will be more and more appealing to potential buyers and to IRS / RES projects in Mauritius?
