Andorra – Property Financing

Can foreign nationals get a mortgage from a local bank or lender in Andorra?

Andorran banks do make mortgages available to foreign citizens and non-residents, though the path to approval is more demanding for those who have not yet established residency. The market operates quite differently from most European countries: while mortgage finance is genuinely accessible, its logic bears little resemblance to that of Spain, France, or other nearby jurisdictions. Andorran institutions tend to function more like private banks than retail lenders — cautious, selective, and attentive to individual financial profiles.

Several Andorran institutions — including MoraBanc, Andbank, Crèdit Andorrà, and Banc Sabadell d’Andorra — extend mortgages to non-residents looking to acquire property in the Principality, particularly for investment or holiday purposes. The overall number of lenders is nonetheless limited. In practice, only a handful of banks operate in Andorra, which restricts the range of options available, and financing for foreign buyers is subject to particular complexity, not least because of the mandatory foreign investment authorisation requirement.

Lending activity in Andorra is governed by a reservation-of-activity regime, meaning that only locally authorised banks regulated by the Andorran Financial Authority (Autoritat Financera Andorrana — AFA) may issue mortgage credit. Loans extended directly by foreign lenders to finance the acquisition of real estate within Andorra are prohibited, as this would contravene the reservation-of-activity framework. This stands in contrast to markets like the UK or Australia, where cross-border mortgage products from overseas institutions are relatively common.

The creation of a mortgage in Andorra requires a notary’s involvement and the execution of a public deed, which must subsequently be registered with the Chamber of Notaries of the Principality of Andorra (Cambra de Notaris del Principat d’Andorra) as a condition of the mortgage’s legal validity. The Chamber effectively serves as the centralised register for mortgage deeds in the country.

Andorra’s banks approved a record 1,064 new mortgages in 2025, a 38.4% increase from 769 in 2024 and the first year on record to exceed 1,000 approvals since data collection began in 2015. Nationals accounted for 90.3% of approvals, but foreign applicants rose sharply — from 36 to 103 — even amid the introduction of the foreign real estate investment tax. While the market is becoming more open, it remains skewed heavily towards long-established residents.

What deposit or down payment is typically required for a foreign buyer in Andorra?

Deposit obligations in Andorra arise at two distinct moments in the purchase process: the initial reservation deposit paid on signing a preliminary purchase contract, and the mortgage deposit representing the portion of the property price not covered by the loan. It is important not to conflate these two separate requirements.

At the reservation stage, buyers sign a promise-to-purchase contract and pay 10% of the agreed price as a deposit, which removes the property from the market and prevents further viewings. This sum is non-refundable unless the seller has failed to comply with the terms of the contract or applicable law. This upfront non-refundable commitment sets Andorra apart from many other jurisdictions where no deposit is needed to hold a property.

With regard to the mortgage itself, banks will ordinarily finance up to 80% of the purchase price or the valuation — always applying whichever figure is lower. However, this upper limit on loan-to-value is primarily reserved for buyers with established residency. For applicants who are not yet resident in Andorra, lenders apply considerably more stringent conditions, with financing ratios that seldom exceed 50–60%.

For foreign nationals, the terms shift significantly compared to residents. A non-resident buyer should typically expect to provide a deposit of around 50% of the property value in order to secure mortgage approval, and not every bank will consider a foreign application — terms and appetite vary between institutions.

Residency status is the single most decisive factor in determining what conditions a buyer will face. Obtaining residency fundamentally alters the assessment framework and the options available. Employment type and income stability are also relevant: Andorran banks will not approve mortgage repayments that exceed 35% of an applicant’s income. Borrowers should always confirm current LTV parameters directly with individual lenders or with the Andorran Financial Authority (AFA), as conditions are subject to change.

What interest rates and loan terms are available to foreign borrowers in Andorra?

The average mortgage interest rate in Andorra rose steadily from 1.21% in 2021 to 1.55% in 2022, 3.48% in 2023, and 3.79% in 2024. Although official 2025 figures are not yet published, current advertised products from local banks suggest that, in line with broader European trends, borrowing costs in Andorra have eased somewhat from their recent peak.

As of March 2025, Euribor stood at approximately 2.5%. Fixed-rate mortgages were being offered at 3.25–3.75%, while both variable and short-term fixed products were available in the 2–3% range. Andorran mortgage rates are generally anchored close to Euribor, with a margin applied to maintain positive territory.

In contrast to countries such as Germany or France, where 20- or 25-year fixed-rate products dominate, Andorra has historically leaned toward long fixed terms — but this is shifting. Lifelong fixed rates are becoming less standard, with banks increasingly offering five-year fixed periods that convert to variable rates thereafter. As of 2025, average monthly repayments on residential mortgages stood at €1,394, with an average remaining term of 13.35 years across outstanding loans.

Foreign borrowers should be aware that their rate may be set higher than rates offered to residents. Mortgage conditions in Andorra typically include a contractual provision to increase the interest rate if the borrower loses residency status, and similarly if the borrower’s salary ceases. These clauses are embedded in the mortgage deed and constitute an important consideration for anyone whose residency or income could be subject to future change. Readers should check current rate offerings directly with Andorran lenders, as rates move in line with Euribor and individual credit assessments.

The concept of remortgaging is also relatively new to the Andorran market. Practices such as mortgage porting, mortgage selling, and refinancing have not historically existed in Andorra, though some banks have as of 2024 begun to entertain remortgaging requests — though this still requires considerable persuasion and a demonstrably healthy income.

What documents and eligibility criteria do foreign nationals need to apply for a mortgage in Andorra?

Andorran banks do not offer a standardised public mortgage application form of the kind found in many retail banking systems. Perhaps counterintuitively, lenders will not commit to financing until a genuine purchase intention has been established — typically once an arras contract or detailed property terms have been provided. Indicative simulations are not commonly offered.

The following documents are generally required when a foreign national applies for a mortgage:

1. Valid passport or national identity document
2. Proof of income — recent payslips, an employment contract, or audited business accounts for self-employed applicants
3. Tax returns from your country of residence (typically covering the last two to three years)
4. Recent bank statements reflecting assets and liabilities
5. Evidence of the source of funds (required under Andorra’s Anti-Money Laundering Law)
6. Property valuation or appraisal report
7. A signed preliminary purchase contract (arras or Contracte de Reserva)
8. Residence permit (if applicable) or documentation relating to current immigration status
9. The approved Prior Authorisation for Foreign Investment (Autorització Prèvia d’Inversió Estrangera), where applicable

The application process is comprehensive. Borrowers must produce income evidence, tax records, and a clear account of existing assets and liabilities. Banks generally finance up to 70% of the property value, and both financial solvency and the origin of the buyer’s funds are central to the lending decision. Supporting documentation may include bank statements, income proofs, or any other material capable of substantiating the buyer’s capacity to complete the transaction.

Foreign credit histories are taken into account, but they cannot be cross-referenced through Andorra’s own credit infrastructure. For a borrower in stable salaried employment, securing mortgage approval from an Andorran bank is generally achievable. Difficulties tend to arise where income is irregular — with some years generating earnings and others not — or where the applicant is a business owner who cannot demonstrate a consistent track record of foreign business profits.

No specific published minimum income threshold applies to foreign mortgage applicants, but the 35% debt-to-income ceiling noted above acts as an effective qualifying filter. Check with the AFA or individual lenders for any current thresholds or updated requirements.

Are there any restrictions on the types of property foreign nationals can finance in Andorra?

Andorra has enacted significant regulatory reforms in recent years that directly affect what foreign nationals are permitted to acquire — and therefore what they are able to finance. Foreigners may purchase property in Andorra subject to government authorisation, though regulations introduced in 2025 imposed strict acquisition limits and new tax obligations for non-resident buyers.

Under the law approved by the Andorran government on 29 July 2024, restrictions on property acquisition apply to non-resident individuals, those with fewer than three years of residency, foreign legal entities, and Andorran entities in which foreign capital exceeds 25%. These parties may only acquire two flats or studios together with their annexes (up to three parking spaces and three storage rooms per flat), a single-family house or a plot of land designated for single-family construction, or three parking spaces.

Foreign real estate developments are prohibited unless the development is destined for the rental market. This is a critical constraint for buyers contemplating the acquisition of multiple investment properties or the development of land for resale purposes. Financing for such restricted categories is effectively unavailable to foreign nationals through Andorran banks.

The purchase of vacant land in Andorra is subject to more onerous conditions, particularly for foreign buyers. In most circumstances, non-residents may not acquire land unless it is earmarked for a permitted use such as development or agriculture. The 2025 Act on Sustainable Growth and the Right to Housing (Llei 5/2025) revised numerous provisions in this area, so buyers should verify current rules directly with the Government of Andorra or through the Chamber of Notaries, which maintains the centralised property register.

There are no geographic exclusion zones specifically targeting foreign buyers — Andorra does not impose border-region or rural-area restrictions of the kind found in some other small states — but parish-level planning regulations (POUP) can affect development rights. Prospective buyers should consult the relevant parish authority (Comú) regarding local planning constraints before committing to a purchase.

Are there government schemes, developer financing, or alternative routes to financing property in Andorra?

In response to conditions in the Andorran property market, the government has put in place a programme aimed at improving access to home ownership. These measures do not extend to non-residents, nor are they available to all residents, so eligibility cannot be assumed. Government-backed housing support is therefore effectively out of reach for foreign nationals who have not established long-term residency in the Principality.

Developer payment plans are used in Andorra, particularly in relation to off-plan new-build properties, which represent a substantial portion of current market supply. The Andorran property market continues to be characterised by off-plan developments, high-rise towers, and premium chalets. Buyers of new-build units may be able to negotiate staged payment schedules with developers that reduce the immediate reliance on bank financing, although these are purely commercial arrangements and differ from one developer to the next.

Private seller financing — where a vendor extends credit directly to a purchaser — is not a recognised feature of the Andorran market and should be approached with considerable caution. Andorran banks remain the primary and, in most formal respects, the only authorised source of mortgage credit in the country. Any private lending arrangement would fall outside the regulated mortgage framework and would require thorough independent legal review before any funds are committed.

For buy-to-let investors, the Foreign Investment Real Estate Tax introduced in 2024 contains a notable incentive: Law 3/2024 includes a 90% tax reduction for acquisitions intended for long-term rental purposes, a measure designed to expand the supply of affordable housing in the local market. To qualify for this reduction, the investor must maintain the property in a rental arrangement for a minimum of 10 years.

Can foreign nationals use overseas financing — such as releasing equity from a property abroad — to fund a purchase in Andorra?

As noted above, lending in Andorra falls under the reservation-of-activity regime and may only be carried out by banks authorised by the AFA. Foreign lenders are not permitted to issue mortgage credit directly secured against property located within Andorra, as doing so would breach this regulatory framework.

Indirect lending, however, is permissible — that is, a foreign institution may grant financing to a foreign entity which then uses those funds to acquire real estate in Andorra. In practical terms, this means that a buyer could release equity from property held in their home country through their domestic financial system, receive the proceeds, and deploy those funds to purchase in Andorra — either as an outright cash buyer or to supplement a smaller mortgage from an Andorran bank. This is an approach used by a number of international buyers.

International mortgage brokers cannot arrange a loan secured directly against an Andorran property through a foreign lender, but they can help structure cross-border financing arrangements such as equity release or international portfolio lending. Currency considerations deserve careful attention: Andorra uses the euro, so buyers holding assets in other currencies are exposed to exchange rate risk. A significant movement in exchange rates between the signing of a purchase contract and completion can materially alter the effective cost of the acquisition.

Large inbound transfers to Andorra attract anti-money laundering scrutiny. Real estate agencies, as entities subject to Andorra’s Anti-Money Laundering Law, are obliged to apply due diligence measures commensurate with the complexity of the client and the transaction. Buyers introducing substantial sums into Andorra should be ready to document the full origin and history of those funds.

Are new property owners liable for any outstanding debts or charges on a property in Andorra?

When property changes hands in Andorra, the obligation to settle any existing debts rests with the seller, and it is standard practice for such debts to be discharged before the transaction completes. Nonetheless, buyers are well advised to take proactive steps to confirm that all outstanding obligations have been resolved during the course of the purchase process.

Property transactions — including sales, leases, and mortgages — are registered with the Andorran Property Register. This registry safeguards ownership rights and ensures that any claims against a property, such as mortgages or liens, are properly documented. Unlike systems in which title insurance is routinely purchased to guard against undisclosed claims (as is standard practice in the United States), Andorra relies principally on the notarial process and register searches to confirm clean title before ownership is transferred.

Prior to completing a purchase, buyers should review the property register to confirm that the seller holds unencumbered title and that no outstanding mortgages, liens, or legal claims are recorded against the property. Many buyers engage a lawyer to carry out these checks and to verify that all documentation is in order.

The step-by-step purchase process in Andorra underscores the importance of thorough due diligence:

1. Instruct a local lawyer experienced in Andorran property law and the foreign investment authorisation process.
2. Request a full title search from the Property Registry of Andorra to check for any existing mortgages, liens, or encumbrances.
3. Sign the preliminary reservation contract (Contracte de Reserva) and pay the 10% deposit.
4. Apply for the Prior Authorisation for Foreign Investment (if required) — allow at least two to four weeks for processing.
5. Commission an independent valuation of the property.
6. Apply to an AFA-authorised bank for a mortgage, if required, presenting the purchase contract and documentation.
7. Arrange payment of applicable taxes (ITP or IGI, and FIRET where applicable) before the notary appointment.
8. Sign the public deed of sale (escriptura pública) before a notary, at which point the mortgage deed is also signed if applicable.
9. Arrange registration of the new deed with the Property Registry of Andorra.

Working with a qualified solicitor or property professional is strongly recommended for conducting thorough due diligence on the financial status of a property and ensuring it is free of encumbrances. Including appropriate protective clauses in the sale contract can also help safeguard the buyer’s position and clearly allocate responsibility for any outstanding obligations between the parties.

Readers should verify the current status of any property they intend to acquire through the Chamber of Notaries of Andorra, which maintains the official register of property deeds and mortgage registrations.

What taxes and additional costs should foreign buyers budget for when financing property in Andorra?

The true cost of buying property in Andorra is substantially higher than the headline purchase price alone. Costs borne by the buyer fall broadly into four categories: purchase tax (ITP or IGI), notary and registry fees, foreign investment authorisation (where applicable), and the practical costs associated with setting up after completion.

The main items to include in any budget are:

• Property Transfer Tax (ITP): The ITP, broadly equivalent to stamp duty, is payable by the buyer and amounts to 4% of the agreed sale price. This applies to resale properties. New-build properties are ordinarily subject to IGI (Andorra’s indirect tax) instead.
• Parish stamp duty (Comú): A further stamp duty is payable to the relevant Comú (local parish authority), fixed in all parishes at 1.5% of the purchase price.
• Foreign Investment Real Estate Tax (FIRET): This progressive indirect tax is levied on the real value of the acquisition and comprises four tranches: 3% on the purchase of a first property, 5% on a second and any subsequent purchases, and 10% for investments exceeding the standard thresholds or falling outside the above categories — such as large real estate developments, luxury properties, or speculative acquisitions. This tax took effect in February 2024 and applies to non-residents and those with fewer than three years of Andorran residency.
• Notary fees: Notary fees amount to approximately 0.7–1% of the purchase price and are exclusively the buyer’s responsibility.
• Foreign investment authorisation fee: The authorisation application carries a cost of €300 when submitted independently, and currently takes two to three months to be processed.
• Legal and agent fees: Notary services account for 0.5–1% of the transaction value. Estate agency fees are approximately 5–10% of the property price, though these are generally borne by the seller.
• Mortgage arrangement costs: Lenders may levy arrangement, valuation, and administration charges in addition to standard transaction costs. Confirm current figures directly with your lender.
• Capital gains tax on future sale: From 1 January 2024, real estate capital gains tax has been incorporated into Andorra’s standard direct taxation framework. The applicable rate on gains is 10%, rising to 15% for speculative gains realised within a period of less than two years.

In aggregate, associated acquisition costs typically range between 4.5% and 11% of the purchase price for a straightforward resident purchase. For foreign nationals subject to FIRET, total additional costs can be considerably higher. Readers are advised to seek guidance from a local tax professional or consult the Andorran Ministry of Finance for the most current rates, as the regulatory environment has changed substantially in recent years and may continue to evolve.

What should foreign buyers know about currency exchange and transferring funds into Andorra?

Andorra’s official currency is the euro. Buyers whose income or assets are denominated in a non-euro currency — whether sterling, Swiss francs, US dollars, or another denomination — face exchange rate risk at two critical junctures: when transferring the deposit and when completing the purchase. Even a modest currency movement of a few percentage points can add or remove tens of thousands of euros from the effective cost of a typical Andorran acquisition.

Buyers who take out an Andorran mortgage in euros while earning income in another currency face ongoing exchange rate exposure throughout the life of the loan. It is worth considering whether hedging instruments — such as forward contracts available through specialist currency brokers — are appropriate, particularly for large one-off transfers or regular monthly repayments.

Real estate agencies, as entities subject to Andorra’s Anti-Money Laundering Law, are required to apply due diligence measures proportionate to the complexity of the client and the transaction, gathering more or less documentation prior to the purchase accordingly. Banks apply equally rigorous source-of-funds checks on large inbound transfers, consistent with Andorra’s obligations as an FATF member and its broader anti-money laundering framework. Buyers should be prepared to document the complete chain of ownership of funds — whether derived from savings, a property sale, equity release, or investment proceeds.

There are no general restrictions on transferring funds into Andorra for the purpose of purchasing property, provided the foreign investment authorisation process has been completed where required. However, repatriating the proceeds of a future property sale may carry tax implications both in Andorra and in your country of origin, depending on any applicable double taxation treaty. Andorra has concluded double taxation agreements with 10 countries. Clarify your position with a qualified tax adviser before completing your purchase.

For authoritative guidance on financial regulation and cross-border fund transfers, consult the Andorran Financial Authority (AFA), which oversees the banking sector and governs the rules applicable to international capital flows.

Frequently asked questions

What happens to my Andorran mortgage if my residency permit is not renewed?

If you lose residency status, the interest rate on your mortgage is likely to increase, and this provision will be set out explicitly in your mortgage deed. Your property will not be automatically forfeited, but your monthly repayments will rise. It is essential to read your mortgage deed carefully and obtain legal advice on the implications of this clause before you sign.

Will a foreign credit score or credit history be recognised by Andorran banks?

Andorran banks have no access to overseas credit reference systems, meaning a strong credit record built up abroad cannot be directly transferred into a local credit assessment. Lenders instead rely on foreign tax returns, bank statements, payslips, and an overall picture of the applicant’s financial standing. The most effective way to compensate for the absence of a domestic credit record is to demonstrate sustained and well-documented income over several years.

Can I get a mortgage as a self-employed person or business owner?

Approval difficulties typically emerge where income is inconsistent — alternating between profitable and unprofitable years — or where the applicant is a business owner without a clear track record of foreign business earnings. Self-employed applicants will generally need to supply at least two to three years of audited accounts and tax returns. Loan terms may be less advantageous than those offered to salaried employees, and a higher deposit may be required.

If I relocate again after purchasing, can I keep my mortgage?

In principle, yes — Andorran mortgages are secured against the property itself rather than being conditional on the borrower’s physical presence in the country. However, as outlined above, losing residency may trigger a contractual rate increase. Furthermore, if you are no longer tax-resident in Andorra, any rental income derived from the property may be subject to different tax treatment. Take independent tax and legal advice before relocating while retaining a mortgaged property in Andorra.

Do I need to open a bank account in Andorra before applying for a mortgage?

In practice, yes. Andorran banks expect mortgage repayments to be collected by direct debit from an account held with them or with another local institution. Establishing a bank account in Andorra ahead of beginning the mortgage application will also demonstrate commitment as a borrower and help to expedite the due diligence process.

Is there a minimum property value or transaction size for foreign buyers seeking a mortgage?

There is no officially published minimum mortgage amount for foreign buyers, though the realities of the Andorran property market — where the average asking price for residential property reached €5,249 per square metre as of July 2025 — mean that most transactions involve substantial sums. Given the administrative complexity involved, banks are unlikely to process small mortgages for non-residents. Speak directly with individual lenders about their minimum loan criteria.

Does buying property in Andorra give me the right to reside there?

Property ownership does not automatically confer residency rights. These are distinct legal processes in Andorra. That said, owning property can support a residency application — for example under the passive residency route — and can serve as evidence of financial ties to the Principality. Passive residency is one type of residence permit that can facilitate property acquisition by non-nationals. Consult the Andorran Immigration Service for current residency requirements.

Where can I find the most up-to-date official information on Andorran mortgage rules and property taxes?

For mortgage regulation and lender authorisation, consult the Andorran Financial Authority (AFA). For property ownership rules, title searches, and mortgage registration, contact the Chamber of Notaries of the Principality of Andorra (Cambra de Notaris), which serves as the central property register. For current tax rates — including ITP, FIRET, and capital gains — refer to the Andorran Ministry of Finance or seek advice from a locally registered tax professional.