The procedure for buying a property with a mortgage

Quick overview

• When buying a property with a mortgage, first check how much the bank will lend you and how much you have to pay from your own resources.
• For owner-occupied homes, the typical LTV limit is 90% for applicants under 36 and 80% for other applicants; a stricter recommendation applies to investment mortgages from 1 April 2026.
• Then, check the property at the Land Registry, check for legal defects, sign the reservation contract only after a solicitor has checked, and transfer the purchase price ideally through escrow.
• It is safest to reconcile the mortgage, the purchase contract, the mortgage agreement, the escrow and the proposal for registration in the Land Registry before signing the final documents.

Are you planning to buy a flat or house with a mortgage? Let us review the reservation agreement, purchase agreement and escrow before signing. In real estate, a single sentence in the contract often makes all the difference.

Clarify your financial situation

First of all, you need to clarify your financial possibilities and set a maximum budget for the purchase of the property. Three factors will play a big role in this area:

1. The obligation to pay at least 10% or 20%

If you are taking out a mortgage and you are under 36, you are obliged to pay at least 10% of the purchase price of the property. If you are over 36, then your minimum deposit must be 20%. So you have to take into account that if you plan to take out a mortgage on a property worth 5 million, you must have already saved or otherwise provided 500,000 (or a million) in advance, as you will have to pay these upfront.

2. Your income and age

Whether you qualify for a mortgage depends mainly on your income, expenses, age, existing loans and the value of the property you are mortgaging.

1. In 2026, the LTV– the ratio between the loan amount and the value of the property – is particularly key for conventional buy-to-let mortgages. Applicants under the age of 36 can typically achieve up to 90% of the value of the property for a self-build home, while other applicants can typically achieve 80%. The remainder of the purchase price must be paid from own resources.
2. The DTI and DSTI are no longer set as binding limits for conventional mortgages by the CNB, but banks continue to monitor them when assessing creditworthiness. In practice, this means that even if you meet the own resources requirement, the bank may not approve your mortgage if the repayment would be too high for your income or if you already have other loans.

Also watch out for investment mortgages, situations where you are not buying a property for your own home but, for example, to rent out. From 1 April 2026, the CNB recommends that banks assess these loans more strictly, particularly LTV 70% and DTI 7.

Unsure whether you are covered by the owner occupied or investment mortgage scheme? When we review the contracts , we can help you set up the whole transfer to comply with the bank’s terms and conditions and the safe transfer of ownership.

3. Your financial history

The mortgage you get also depends on how you repay your loans and bills (e.g. electricity and gas). If you have a history of ‘black marks’ on your repayments this will also be reflected in your mortgage.

Finding a property

If you have already worked out how big a mortgage you can get and have saved the necessary 10% or 20% of the property price, it’s time to look for your dream property. Once you’ve got your eye on something, it pays to find out all the information you need about the property.

Checklist

Before you pay the reservation fee, check at least the basic legal and practical information about the property:

• who is the actual owner of the property,
• whether the property is subject to a lien, encumbrance, execution or prohibition of alienation,
• whether the information in the advertisement corresponds to the land register and the actual situation,
• whether the property can be financed by mortgage,
• whether the purchase price corresponds to what the bank is willing to accept in the appraisal,
• whether the reservation contract addresses the situation where the bank does not approve the mortgage.

In the case of the purchase of an apartment, the main issue is its technical and legal condition. You can find out the legal status at the Land Registry. It is also worth measuring the size of the flat to see if it actually matches the information provided by the seller. You should also find out whether there are any outstanding utility bills, for example, or foreclosures by the current owner.

If you are planning to buy a house or land, the situation becomes a bit more complicated for you. In addition to the above information, you should also find out whether the house or land has any easements, which you can find out by looking at the Land Registry again. In addition to the land registry, you should not miss the zoning plan. This determines what you can and cannot do with the land (and whether you can build a house on it at all). Also find out if the house or land is in a conservation area, flood zone or undermined.

Booking contract

Once you are sure of your purchase, you will enter into a reservation contract with the seller. In this you agree to actually buy the property and pay the reservation fee. At the same time, however, you are assured that the seller will not offer the property to anyone else (even if there is a better offer).

The reservation fee is usually 3-5% of the purchase price of the property and is already part of the purchase price, so it is deducted from the total purchase price. In the event that the purchase does not go through, it usually serves as a penalty for breach of contract. So really think carefully when signing a reservation contract.

In practice, we see that the biggest problem with booking contracts is not the amount of the booking fee itself, but the conditions for forfeiture. For example, a client signs a reservation before the mortgage is approved and then finds out that the bank does not value the property as highly as he expected. If the contract does not provide that the loan may not be approved for reasons beyond the buyer’s control, the client may lose the reservation fee even if he has acted honestly.

For this reason, it is advisable to have the reservation contract checked, in particular when the fee is forfeited, who holds it, whether it counts towards the purchase price and what happens if the bank does not approve the mortgage.

Mortgage application

You can now apply for a mortgage. To apply, you will probably need to provide evidence of your income, a bank valuation of the property and a bank and non-bank register check.

Once the bank approves your mortgage, it’s time to sign the loan agreement. In addition to this, you also need to take out property insurance. Without property insurance, the bank will not give you a mortgage. In return, the bank will provide you with a mortgage agreement and a proposal for entry into the Land Registry, which you will give to the seller of the property to sign. Together with this, a purchase contract will also be concluded between you and the seller. You will then submit the application for entry of the mortgage into the Land Registry.

Arranging a mortgage and transferring ownership

The next step is the transfer of the purchase price. At this point, it is worth using an escrow service. An escrow is a special account set up by a lawyer, notary or bank. The purchase price is deposited in this account during the procedure for changing the ownership right at the land registry. Thanks to the escrow, you can be sure that nothing will happen to your money in the event that the ownership is not transferred. However, the seller is equally protected by the fact that he is sure that he will actually receive the money after the transfer.

In practice, it pays to set up the escrow so that the money is not paid to the seller just upon signing the contract, but only after the precise conditions have been met. Typically, this involves authorising the registration of the title in favour of the buyer, registering a lien in favour of the bank and proving that there is no new legal defect on the property. It is these details that determine whether the escrow actually protects both parties or just formally “holds the money”.

We will prepare both the purchase and escrow agreements so that the money goes to the seller only when the transfer is secure and in accordance with the bank’s terms.

You will therefore pay your minimum share of the purchase price of the property into escrow. You will then send the bank the necessary documents to disburse the loan – usually the purchase contract, mortgage agreement, escrow agreement, proof of insurance on the property, proof of filing the mortgage agreement with the land registry, and a receipt for the minimum 10% or 20% payment into escrow. The bank will then send the remaining purchase price of the property to escrow.

This is followed by the entry of the purchase contract into the Land Registry. After the processing of this application (which usually takes 20-30 days), the property is handed over and a handover protocol is drawn up. This should include the meter readings, the number of keys to the property and the equipment that is part of the property.

Previously, you would still have to pay property tax of 4% of the purchase price. However, this is abolished from 2020.

Today’s times are characterized by ever-increasing real estate prices, which is forcing more and more people to use mortgage loans. It is therefore important to understand how the whole process of buying a property on a mortgage works, what to look out for and how to avoid potential problems.

But buying a property on a mortgage is not just a financial decision, it is also an investment in the future and for many a dream come true. It’s a step towards owning a roof over your head and a place to call home. Although the journey to it can be fraught with complications, effort and careful planning, the end result rewards us with a sense of stability and comfort.

Summary

Buying a property with a mortgage starts with credit and equity checks, continues with legal due diligence, checking the reservation agreement, preparing the purchase and escrow agreement, mortgage approval, signing the mortgage agreement and submitting the application for registration with the Land Registry. In 2026, the LTV, i.e. what percentage of the value of the property the bank will lend you, is crucial for ordinary owner-occupied housing; for investment mortgages, you need to expect a stricter assessment. The biggest legal risks arise when signing a reservation contract, if the title deed is not checked properly and if the escrow is not set up properly. If you want to buy safely, have the contracts and mortgage continuity checked before you pay the reservation fee or sign the purchase contract.