The Cape Verde Islands are becoming well established now as an ideal location for people looking for holiday homes abroad; either for use by themselves and their families or as places to rent out to other holidaymakers. The long-term value of these investments can only increase as people become even more aware of the benefits of a Caribbean-type vacation in an environment that is generally safer, less developed and, especially for those traveling from Europe, half the journey time.

Mortgages taken out on Cape Verde properties by non-residents will require them to have a bank account in the islands and will operate using the local currency, Capeverdean Escudos, CVE. It should be appreciated that the interest rate in the islands, although linked with the Euribor, are still relatively high – they can be as much as from 3 to 4.5% above the prevailing rate.

It is possible in the islands to take out a mortgage for existing property or for land – as well as for re-mortgaging purposes. If you are buying off plan, it is quite usual for the developer to want ’staged’ payments during the construction of the build, and there are products available which provide you with the possibility of doing this.

There are now many companies offering buyers mortgage facilities for Cape Verde and it will pay you to investigate carefully before selecting one. It is beneficial, though, to try to work out what type of mortgage you will be able to secure before you actually sign any contracts committing you to purchase. Breaking a Contrato Promessa de Compra e Venda carries financial penalties so be sure of your finances before signing it.

You will find that some companies offering mortgages will offer you terms for 15 years only; some for 25 but some up to 35 years. Similarly, some will stipulate that the mortgage must be redeemed by the age of 60, whereas others are happy to stipulate 75 years of age. Whereas many companies offer loans to a maximum of 70% of the purchase price or the valuation (whichever is the lower figure), there are companies who will offer up to 85%.

What you can expect, though, is that, if you buying property on a mortgage, your total financing and purchasing costs are likely to equate to about 7% of the purchase price of the property. This percentage comprises of personal legal costs of 1%; mortgage registry costs of 3% of the amount borrowed; Notary and Land Registry costs of 3% of the purchase price; and various mortgage and valuation fees of approximately 2%.

International Mortgage Solutions are experts at sourcing Mortgages in Cape Verde and can guide you through this complicated process.