Bermuda – Property Financing

Do local banks issue mortgages to foreign nationals in Bermuda?

While Bermuda operates primarily on a cash-purchase basis, some local and international banks do offer mortgage products for foreign buyers. This is an important distinction from many other offshore property markets, where mortgage access for non-residents may be entirely unavailable through domestic institutions. However, the availability of lending does not mean the process is straightforward — foreign buyers face considerably more scrutiny than residents.

Foreign buyers can access mortgage financing through both local and international banks. Bermuda’s major financial institutions, including HSBC Bermuda and Clarien Bank, offer tailored mortgage solutions for non-residents, although larger deposits — often between 25% and 40% — are typically required. These two institutions are the principal domestic lenders to consider when exploring local financing options.

Bermuda banks may offer mortgages to permanent resident certificate holders, while international private banks may consider lending based on offshore assets. This means the options available to you may depend significantly on your residency status in Bermuda — holders of a Permanent Resident Certificate (PRC) tend to receive more favourable terms than those with no formal ties to the island.

Which lenders offer financing and what are the conditions?

In Bermuda, both local banks and international lenders offer mortgage products to foreign buyers, although requirements can be more stringent than in other markets. Unlike buying property in a country such as France or Spain — where non-resident mortgages are a well-established and relatively accessible product — Bermuda’s tight property market and restrictive foreign ownership rules mean that lenders apply a higher level of scrutiny to international applicants.

Mortgage financing in Bermuda is a crucial financial resource for individuals seeking support in property acquisition. The process of securing mortgage financing commences with potential borrowers providing detailed financial information, including income, assets, and liabilities, to lenders for assessment. Lenders then evaluate the applicant’s credit score, employment history, and debt-to-income ratio to determine loan approval.

Offshore banks based in Bermuda or neighbouring jurisdictions can also offer bespoke financing packages, especially for high-net-worth individuals with multi-jurisdictional portfolios. If you hold assets across multiple jurisdictions, an international private bank with a presence in the region may be better placed to structure a lending solution based on your total wealth picture rather than solely on your Bermuda income.

Most Bermuda banks will not allow the borrower to grant a second mortgage, as they fear the loss of control this would bring. This is an important practical point: if you are planning to leverage a property you already own in Bermuda to finance another purchase, this route is generally not available through local lenders.

Potential buyers in Bermuda undergo a pre-approval procedure, which enables them to determine their budget and enhances their bargaining power when making an offer on a property. This process typically entails submitting documents to lenders such as proof of income, employment history, credit score, and outstanding debts. The pre-approval letter not only assists in narrowing down the search for the ideal property but also signifies a serious commitment to sellers. Obtaining pre-approval before you begin viewing properties is strongly advisable.

What deposit is required when buying property in Bermuda?

There are two distinct “deposit” figures to understand in the Bermuda property purchase process: the sale deposit paid at exchange of contracts, and the mortgage down payment required by a lender. These are separate costs and both need to be budgeted for independently.

A deposit of 10% of the purchase price is payable upon signing sale and purchase agreements. The deposit is held in escrow by the agent or attorney until closing. Interest accrued is for the purchaser’s benefit, and the balance is payable when the sale completes. This mirrors the conveyancing practice familiar to buyers in the United Kingdom and many other common law jurisdictions.

By providing a deposit, the buyer signals their intention to complete the transaction, establishing trust and reliability in the eyes of the seller. The deposit serves as insurance for the seller in case the buyer breaches the agreement, offering compensation for any damages incurred. In practical terms, this means the deposit can be forfeited if you withdraw from the purchase without a lawful reason — so it is important to have your financing and licensing arrangements in order before signing.

If you are obtaining a mortgage, the lender will require a further sum on top of this initial deposit. Typically, buyers should expect to make a down payment of 20% to 30% of the property’s purchase price. Some sources report the upper end can reach 40%, particularly for non-resident buyers without PRC status. Combined with the 10% sale deposit, you will need to have substantial liquid funds available well before completion.

Foreign buyers often purchase properties in cash. Given the scale of the deposit and mortgage down payment requirements, as well as the high entry-level price of qualifying properties, cash purchase is common among international buyers in this market. Cash buyers may benefit from faster transaction times and more favourable price negotiations.

How does the property purchase process work step by step?

Buying property in Bermuda as a foreign national involves a highly regulated process. Working with both a qualified local attorney and an experienced real estate agent from the outset is not just advisable — it is essential. Here is how the process typically unfolds:

1. Identify an eligible property. Non-Bermudians may only purchase property valued above a set minimum Annual Rental Value (ARV). The minimum ARV for houses is $126,000 and $25,800 for condominiums (as of 2025). Not every property on the market qualifies for foreign purchase, so confirming eligibility before proceeding is critical.
2. Engage a local attorney and real estate agent. A Bermuda lawyer should be involved early. Your lawyer will usually guide the legal paperwork, review the agreement, assist with the licence application and help move the transaction towards completion.
3. Obtain mortgage pre-approval (if financing). If you require financing, obtaining pre-approval from a lender should be a priority. Pre-approval clarifies your budget and strengthens your credibility when making an offer.
4. Make an offer and sign the Sale and Purchase Agreement. Once you have selected your property, your agent will draft a Sale and Purchase Agreement, which becomes legally binding upon acceptance by the seller. A 10% deposit is paid at this stage and held in escrow.
5. Apply for the Alien Landholding Licence. To apply, buyers must submit a formal application through the Ministry of Home Affairs, including details of the intended property, proof of financial solvency, police background checks, and personal identification documents.
6. Conduct due diligence and title search. Your lawyer will conduct a title search, confirm property boundaries, and arrange inspections and valuations. This step confirms the property is free from liens and outstanding encumbrances.
7. Receive licence approval and complete the purchase. After receiving all approvals, you will complete the payment of stamp duty, licence fees, and other closing costs. Ownership is transferred upon registration of the title deed.

Approval timelines can vary, with standard processing taking between three to nine months (as of 2025). Buyers should factor this timeline into any planning and ensure that the Sale and Purchase Agreement includes appropriate protections if licence approval is delayed or refused.

Are new owners responsible for outstanding debts on the property?

This is one of the most important due diligence questions for any buyer — and in Bermuda, the legal framework provides clear protections, provided the correct steps are followed before completion. The key safeguard is the mandatory title search conducted by your attorney.

Any existing encumbrances (e.g., liens, easements) on the property must be disclosed during the sale. The buyer has the right to be informed about any debts or obligations attached to the property before completing the purchase. This means a seller cannot legally conceal known debts that are secured against the property.

Your lawyer will conduct a title search to confirm that the property is free from liens or ownership disputes. They will also review the Sale and Purchase Agreement to ensure it aligns with your interests and advise on any necessary adjustments. This process is comparable to a property search carried out in conveyancing in England and Wales, where solicitors check Land Registry records and local authority searches before exchange of contracts.

If a property is subject to a mortgage, the transfer will be subject to clearing or transferring the mortgage. This typically involves the payment of the outstanding mortgage amount or the arrangement of a new mortgage with a financial institution. In other words, an existing mortgage on the property must be settled — either by the seller before completion, or by other financial arrangements — before the title can pass to you cleanly.

Debts converted to judgments may be registered and so attach to real property but would stand behind any earlier registration. This is why the sequence and date of registrations matters — your attorney’s title search will reveal whether any such judgment debts are registered against the property and assess their priority. If any encumbrances are discovered, they must be resolved before you complete the purchase.

Upon completion, the buyer assumes all responsibilities related to the property, including ongoing property taxes, maintenance costs, and any applicable homeowner association fees. This is the standard position — you take on future obligations from the point of transfer, but not the seller’s pre-existing personal debts. The critical safeguard is ensuring your attorney has confirmed a clean title before you sign anything binding.

What other costs should buyers budget for?

Beyond the purchase price, deposit, and mortgage down payment, buying property in Bermuda involves a range of additional costs. Many of these are significantly higher than buyers may be used to in other markets, particularly the government licence fee, which applies exclusively to foreign purchasers.

The licence fee is based on a percentage of the purchase price, dependent upon the nature of the property and the status of the applicant. For example, the purchase of a freehold property attracts a fee of 12.5%, whereas a leasehold condominium fee is 8% (as of 2025). These are substantial sums on already high-value properties and must be planned for well in advance.

The licence fee on purchases of freehold properties is 12.5% of the value of the property, while the licence fee for condominiums is 8% of the value of the condo. Permanent Resident Certificate Holders are treated differently to other foreign purchasers, and the applicable licence fee is 6% of the property value (as of 2025).

Costs associated with the conveyance of a property are usually shared equally between the vendor and the purchaser. These costs include legal fees for preparation of conveyance and stamp duty payable on the deed of transfer. Stamp duty rates in Bermuda vary according to the property’s value, so ask your attorney for a precise calculation based on the agreed purchase price.

Additional costs may include an appraisal fee (from $450 upwards), pro-rated land taxes at closing, a structural survey fee, property insurance, services charges for utility service installation, moving costs, and maintenance fees for condominiums (as of 2025). For ongoing costs after purchase, land taxes are payable in twice-yearly instalments and are based on the annual rental value (ARV) of the property, at rates from 0.8% of ARV for properties below $11,000 ARV to 55% of ARV for properties over $120,001 ARV (as of 2025).

For official and up-to-date information on property regulations and government fees in Bermuda, visit the Government of Bermuda website.

Frequently asked questions

Can any foreign national get a mortgage from a Bermuda bank?

Foreign buyers often purchase properties in cash. However, limited financing options are available: Bermuda banks may offer mortgages to permanent resident certificate holders, and international private banks may consider lending based on offshore assets. Those without PRC status will find domestic mortgage access more difficult and should explore international private banking options.

How much deposit do I need to buy property in Bermuda as a foreign national?

There are two deposit-related costs. First, all buyers need to submit a deposit of 10% of the purchase price once the Sale and Purchase Agreement is signed (as of 2025). If you are taking out a mortgage, you will also need a down payment — larger deposits, often between 25% and 40%, are typically required by lenders for non-resident borrowers (as of 2025).

What happens if the seller has an outstanding mortgage on the property?

If a property is subject to a mortgage, the transfer will be subject to clearing or transferring the mortgage. This typically involves the payment of the outstanding mortgage amount or the arrangement of a new mortgage with a financial institution. Your attorney will identify any mortgage registered against the title during the due diligence process.

Will I automatically inherit any debts if I buy a property in Bermuda?

Not if the process is followed correctly. Any existing encumbrances on the property must be disclosed during the sale. The buyer has the right to be informed about any debts or obligations attached to the property before completing the purchase. Your attorney’s title search is the primary mechanism for identifying and resolving these before completion.

How long does it take to get the Alien Landholding Licence?

The licence acquisition process usually takes around three to six months (as of 2025). Some sources indicate it can take up to nine months in complex cases. Your Sale and Purchase Agreement should contain a clause protecting you if approval is delayed or not granted.

Can I get a second mortgage on a property I already own in Bermuda?

Most Bermuda banks will not allow the borrower to grant a second mortgage, as they fear the loss of control this would bring. If you need additional financing, speak to an international private bank or a financial advisor experienced in multi-jurisdictional property portfolios.

Does buying property in Bermuda give me the right to live there?

While foreigners are permitted to buy property in Bermuda, doing so does not automatically qualify you for citizenship or long-term residency. Residency rights are governed separately and require their own applications. Ownership of a property may support certain residency permit applications, but it does not guarantee approval.

How many properties can a non-Bermudian own?

Generally, a non-Bermudian is permitted to own two residential properties. A non-Bermudian is not permitted to acquire vacant land except in specific tourism developments. These limits are set by government policy and are strictly enforced.