FEBRUARY 2006 UPDATE

The information below relates to a mortgage product that was announced by a leading European bank. This product was launched in January 2006 and has been temporarily suspended, pending discussions with the Croatian National Bank. We are hopeful that the product will soon be available. Keep checking this page for updates, or alternatively, register your interest and we can inform you of any updates.

Mortgages in Croatia

Buying a property in Croatia is now easier than ever with Croatian Mortgages now available with an LTV up to 60%.  If you are a foreign national and have a provable income, then you could qualify for a loan of up to 300,000 Euros.  The interest rates start from 4.4% over a maximum 15 year repayment term.  

In partnership with a well established European Bank, we have developed a simple application process that aims to give a decision in approximately 7 days.  All mortgage applications are processed through Zagreb and our mortgage team will liaise between the client and the bank ensuring all documentation is correctly completed. 

What can you mortgage?

The bank will consider mortgage applications for the following:
• Newly built or “off plan” purchases
• Existing properties which are registered in the Land Registry (Cadastre)
• Ruins or partially finished properties
• Building Land

Applications for Commercial premises will require a separate consultation and mortgage product.

Green / Agricultural Land is not eligible for mortgages. If you are considering buying a farm or property which has a lot of land, it should be possible to obtain a mortgage on the buildings.  Each case is unique and the bank will review each case separately.

How Much Can You Borrow?

As a non-resident you are able to take out a mortgage in Croatia (restrictions may apply to people living in some countries) if you are buying a property here and your mortgage application is successful.  You cannot make a full application until you have found a property that you wish to purchase, how ever you may be able to prequalify for a mortgage – fill out our online form.  You can only borrow money for a property purchase and any additional fees (Notary, Agents Fees, Completion fees, Survey etc) will have to be paid for separately.

The banks will assess how affordable it is for you to take on a mortgage.  To do this they will take into account any existing loans, mortgages, outstanding credit card balance, etc that you may have as fixed outgoings.  They will compare this to your income and providing that your outgoings (including the mortgage that you are applying for) meets their criteria then your application should be successful.

For those that are self employed?

It may be feasible for self employed persons to obtain a mortgage against a Croatian property, but it is not possible to speculate as each case can be very different.  Generally you will need to provide a few years of audited accounts.  Please contact us to discuss your specific circumstances.

Information on Mortgages and Interest Rates used in Croatia

There are two currency options available on mortgage products for non residents – The Euro and the Swiss Franc.  The Euro mortgage is based on the EURIBOR index and the Swiss Franc is based on the LIBOR index

Bank Requirements

As part of the banks requirements for granting mortgages, you will need to open 2 bank accounts.  One of these will be in the currency you borrow and the other will need to be in Croatian Kuna.  We will assist you in opening these accounts.  You will be required to deposit an amount equal to 5 months mortgage payments into the account as a reserve.  Croatian banks also require you to take out Buildings and Contents insurance on the property.  We can assist you in obtaining competitive quotes from leading Croatian Insurers.  Life Insurance is not mandatory when applying for a Croatian Mortgage.

Lender Set up Fees

The Croatian mortgage market is a lot less competitive than the UK or other European mortgage markets and there are a lot less products available to choose from.  All lenders will charge a set up fee which can either be fixed or a percentage of the loan.  Any quotations we provide will include information relating to the set up fee, although it is important to understand that these may change as they are dictated by the lender.

Valuations

When making an application for a Croatian mortgage you must obtain a valuation (at your own cost) from a court appointed expert.  The valuation report submitted by the expert must contain photos of the property to be purchased.  On “new build” real estate or “off plan” purchase the price from the sales contract is considered to be the valuation and no 3rd party confirmation will be required.  Valuations should cost between 200 to 600 Euro dependant on the location and additional fees may be charged to cover related travel expenses. There may be variations to the indicated costs should your planned purchase be deemed unique e.g. A place of national importance, building land, this is not a exclusive list and the bank will advise on each case separately.

How long does an Application take?

If you are applying for a Croatian mortgage you will be required to provide numerous documents (see list below).  Providing your application file is complete and no documents are missing a mortgage offer can normally be issued in 2 to 4 weeks.  We can sometimes fast track urgent applications providing we have all the documentation.  Additional fees may be incurred and the client will be notified before hand.

What Documentation do you require?

The following documents are required by the applicant.  This is not an exhaustive list and the lender may require additional documentation dependant on your circumstances:
• Application form
• Proof of Employment
• Last 3 pay slips, translated by a certified court interpreter and verified with the public notary
• Confirmation of the domicile bank on the account balance, translated and verified as above
• Photocopy of passports from all loan applicants
• Preliminary or Sales Agreement, verified by the Public Notary
• Valuation report

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. Suitable security and adequate life cover may be required by the lender.  Written quotations are available on request.

For more information or to discuss your requirements, please contact us at: info@croatianhouse.com