How much can I borrow for a home in Italy?

Yardstick 1: the value of the property

The Banca d’Italia’s guide says a lender generally grants an amount based on the property’s value, which does not exceed 80% of the value set by the independent appraisal (perizia), as well as on its creditworthiness assessment. Lenders sometimes go beyond 80% but then require further guarantees and often less favourable terms. Art. 38 of the Testo unico bancario leaves to the Banca d’Italia the setting of the maximum amount of property-secured loans relative to the value of the mortgaged property.

What follows for you:

• The cap runs from the appraised value, not necessarily the price. If the appraisal is below the price, the gap is yours to fund.
• At 80%, you need at least 20% of the value in your own money, plus the costs below.
• A guarantee scheme can change the picture for eligible young buyers: see state help for young first-home buyers.

Calculation, not a quote: on a property appraised at €250,000, 80% = €200,000. If the price is €260,000, you fund €60,000 yourself before costs.

Yardstick 2: the instalment against your income

The guide advises working out your monthly availability after ordinary expenses and keeping the instalment to no more than a third of that disposable income, so that you can face current and unexpected spending and possible falls in income through illness, accident or dismissal. It adds that your income should be assessed “above all in prospect”, meaning what you can reasonably expect over the years ahead. The guide does not define “disposable income” as a figure. Lenders use their own ratios, which Payotte did not find in the official sources read.

Turning an instalment into a loan size

The instalment of a constant-instalment loan (the “French” method most common in Italy, per the Banca d’Italia) follows from the amount P, the monthly rate i (the annual rate divided by 12) and the number of months n:

instalment = P × i ÷ (1 − (1 + i)^−n)

and, the other way round, P = instalment × (1 − (1 + i)^−n) ÷ i.

Calculation, not a quote, using 3.55%, the ECB’s average agreed rate on new Italian house-purchase loans in August 2026 (the term is an assumption of this example):

Reading across: a longer term lowers the instalment and raises the interest, as the Banca d’Italia explains with its own example. If your disposable income is €3,000 a month, a third is €1,000, which at 3.55% over 25 years supports a loan of about €198,700 (rounded). To test your own figures use the mortgage calculator, and remember the rate you are offered will differ from the market average. Whether your rate is fixed or variable also changes the instalment over time: see fixed or variable rate.

Beyond the loan: the cash you need

The loan covers the price, not the whole bill. Add:

• Purchase taxes. For a resale home bought from a private seller as a prima casa, registration tax is 2% (minimum €1,000) plus €50 + €50 for mortgage and cadastral tax. Without the relief the registration tax is 9%. Calculation, not a quote: on a €300,000 home taxed on the price, 2% = €6,000. See total cost of buying.
• Tax on the loan. If a bank lends, the substitute tax is 2% of the loan, or 0.25% for a prima casa (Banca d’Italia). On €200,000: 0.25% = €500, or 2% = €4,000.
• Lender costs. File-opening fees (a fixed amount or a percentage of the loan), valuation fees, and the notary’s fees for the loan deed and the mortgage registration; plus insurance premiums where required.

The notary’s fee is not set by a tariff, so none is given here: get a written quotation.

Credit history and the interest deduction

Lenders see your record in the Banca d’Italia’s credit register (loans above €30,000, and defaults of any amount). Existing loans reduce the room for a new one; check your own entry free of charge before applying. See how banks assess an application.

Interest on a mortgage for your main home earns a 19% deduction on up to €4,000 of interest a year, according to the Agenzia delle Entrate; for contracts signed from 1 January 2025 by taxpayers with income above €75,000 the amount is capped by income and dependent children. Calculation, not a quote: 19% × €4,000 = €760 at most. Treat this as a bonus, not as borrowing capacity, since the lender will not count it as income.

Which professional to consult

A mortgage broker can test your figures against several lenders’ criteria, and a surveyor can explain why an appraisal may come in below the price. A notary gives the quotation for the deed. For a non-resident, see mortgage for non-residents.