The Mortgage Market In Bulgaria

The interest rates of mortgages for properties in Bulgaria vary from 6 to 7% - much higher than those in Spain and France.

As more and more Brits are investing in Bulgaria the financial institutions and mortgage lenders are interested in expanding their business in our country. According to British mortgage brokers Bulgaria is one of the top 5 hotspots in the market.

 

However at this stage most mortgage brokers offer products of Bulgarian banks.

The new mortgage markets

Along with the traditional second home markets like Spain and France, Bulgaria is gaining more and more popularity. The prices of real estates are very low and affordable to British buyers. Another big plus is the admission to the European Union which makes the buying process even easier. The quality of properties in Bulgaria rises and therefore the price goes up as well. Here comes the need of a mortgage.

Still the level of interest rate varies from 6 to 7% which is way higher than in Spain and France – 3-4% . Also the maximum you can get is up to 80% finance while in the traditional market you can get up to 90%.

 

Mortgage Mediators

While purchase of a local resident can be relatively smooth and easy, the purchase made by a foreigner would require help of a mortgage mediator. Two years ago a normal foreign buyer would not meet the requirements of the banks. Unlike the British market, in Bulgaria the mortgage sphere is still in its infancy and there are just a few available products.


Mortgages for Brits in Bulgaria

 

At this stage a few Bulgarian banks offer mortgages to foreigners and the interest rates vary from 6.7 to 9.9%. Only two of them offer credit for the purchase of a property and the land going with it. Those are very specific products as for such kind of deals the buyer must form a company. Although the companies registered are with limited liability the foreigner is responsible as a physical person with all their possessions. The credits leased by Bulgarian banks to foreigners use their Bulgarian property as a guarantee. Even if they lease 70 % of the property price the banks re-mortgage the whole property under the condition that it has no other bonds.

With the penetration of international financial institutions on the Bulgarian market, interest rates will definitely lower down with 1-2%.