Mortgages in Bulgaria

Banks are interested in increasing their number of clients, so they are constantly developing new credit products. At the same time, since the Anti-Money Laundering Measures Act came into force, many banks have been wary of working with foreigners in order to avoid numerous inspections, so certain difficulties with arranging a mortgage are possible. In practice this means that many foreigners are refused after the bank has reviewed their application for an additional fee.

Required documents

The list may vary depending on the bank and on the foreign national’s status in Bulgaria. Most often it includes the following documents:

• International passport.
• Identity card (for holders of a long-term residence permit, permanent residence permit, EU long-term resident status).
• A certificate of personal income. As a rule, banks require a minimum annual income of EUR 10,000–20,000.
• A credit history document.
• An application.
• A certificate of marital status.
• Life and property insurance.

The applicant must be at least 21 years old when the loan is granted and no more than 65 years old when the payments end.

The down payment is 20-30%.

Formally, loans are granted even to foreigners who do not reside permanently in the country, but in practice foreign nationals residing in Bulgaria on a long-term or permanent basis have a better chance of arranging a mortgage.

Some banks require additional conditions to be met. For example, to obtain a mortgage from UniCredit Bulbank you need at least one year of employment record, a good credit history and no other mortgage loans on the property used as collateral.

The terms for obtaining a mortgage loan are usually less favourable for foreigners than for Bulgarian citizens. For example, for Bulgarians the standard mortgage term is 25 years, while for foreigners it is 15. The interest rate may also differ. Sometimes an additional deposit may be required – if a foreigner is late with loan payments, the bank unblocks these funds and settles the overdue amounts.

The loan procedure

Obtaining a mortgage starts with a visit to the bank and a conversation with a consultant. An application is filled in, to which the required documents must be attached. The bank’s specialists inspect the selected property and calculate its market value.

At this stage the bank may order a check, on the basis of which the loan will be approved – or the loan will be refused. Many banks charge for such a check; its cost may vary, but on average it is EUR 50–200. As a rule, the check takes from one to seven days.

If the loan is approved, a contract is signed. The bank’s client pays the fees and takes out insurance policies. For example, the bank may additionally charge a fee for calculating the credit risk (usually 0.3% of the amount), for issuing a mortgage certificate (about 20–30 leva) and for additional services, if any are provided.

To improve your chances of obtaining a mortgage in Bulgaria, you need to prepare all the documents as carefully as possible. The staff of Bulgarian Expert are ready to help you with this challenging task, and also to act as interpreters in negotiations with the bank.

Opening accounts with Bulgarian banks

How can long-term residence permit holders work in Bulgaria?

Company registration in Bulgaria