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11 things to know about getting a home loan in Croatia: Guide for 2023

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When you’re considering purchasing a home and getting a mortgage, every bit of quality information and advice is welcome. It’s useful to hear other people’s experiences and read everything you can find about the subject.

It is a long-term decision, so take enough time before you make a final decision. Purchasing a property outside of your home country can be especially nerve-wracking. To make it a bit easier, we’ve laid out things that you should know before seeking a mortgage in Croatia.

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The facts are these…

11 things to know about getting a home loan in Croatia

#1 Difference between a mortgage loan and a housing loan

A mortgage loan (hipotekarni kredit) is a loan in which you use your property as an insurance instrument, e.g. collateral to get a specific amount of money. If you don’t pay your loan rates to the bank on time, the bank can take this collateral property to settle the debt. [Read: How to get a mortgage loan in Croatia]

A housing loan (stambeni kredit) is a loan used for the purchase of an apartment or a house, for the construction of a new house, or the reconstruction and improvement of an existing house or apartment. This house or apartment is at the same time an insurance instrument and the bank can take it over if you don’t pay your loan rates regularly. [Read: How to buy residential real estate in Croatia]

#2 What is a “pledged property”

A pledged property (uložena nekretnina) is a property you may use as an insurance instrument, like collateral, when applying for a mortgage loan. This gives the bank the right to take over your property if you’re not making your debt payments on time or if you have completely stopped making payments.

When applying for a mortgage loan (hipotekarni kredit), you will “pledge” your existing property. When applying for a housing loan (stambeni kredit), the pledged property will be your new apartment.

#3 You can get a mortgage loan in a foreign currency

You do have the option to get a mortgage loan in a foreign currency; it doesn’t have to be in Croatian kuna. If you decide to get a mortgage in a foreign currency, make sure it is a stable one as fluctuations can have an impact on your mortgage loan rate. For example, the euro exchange rate is fairly stable.

Regardless of the currency of your loan, you are required to repay your loan in Croatian kuna. If you took a loan in euro, you will repay the loan in kuna according to the HNB – Hrvatska Narodna Banka (Croatian National Bank) average exchange rate for the euro valid on the day of repayment. The latest exchange rate is available here.

#4 What is the typical interest rate

Interest rates for mortgage loans can vary wildly depending on the bank, your age, repayment period, and financial situation. Every bank has its own rules. For housing loans, the interest rate can vary from 3% to 7%.

You can check out the interest rates for Croatia’s biggest banks here.

#5 You may get back your paid interest

For every housing loan, you will pay a defined interest rate. The good news is that the money you pay in interest to the bank is calculated into your annual tax refund. This means that when the state calculates the annual amount of money that will be returned to you as a tax refund, the interest rate paid to the bank will also be included in this refund. Of course, this assumes that you are a tax resident of Croatia.

#6 What if you are older than 60

When a bank calculates your repayment period, it assumes that you will pay off your mortgage by the time you are 60. The number of years you have left before turning 60 will determine your repayment period.

If you are near or older than 60, getting a mortgage will be much harder. If you are considered for a loan at all, you may only be approved for a small portion of the purchase price or submit additional collateral. Policies vary from bank to bank.

#7 Only certain properties can be purchased with a mortgage

According to the Zakon o stambenom potrošačkom kreditu (Law on housing consumer credit), you can get a mortgage loan for:

  • Family house or apartment intended for housing or a house or apartment intended to be used for vacation rentals
  • Garage or parking space, which the consumer purchases or pledges together with the property
  • Land intended for the construction of a property

#8 Banks won’t finance the whole purchase price

Banks will not fund 100% of the property purchase price. Usually, they will fund only 75%. The remaining 25% you must pay in cash directly to the owner. If you’ve made it to this point, you’ve already paid 10% to the owner in the first contract. So, you only need to pay an additional 15% in cash to the owner.

These percentages may vary slightly depending on a variety of factors like the bank, your financial situation, or the value of the house, but the difference will be negligible.

#9 Your residency status makes a difference

Before approving a mortgage, Croatian banks want assurance that you will pay them back. If you have temporary residency, it is highly unlikely that you will be approved for a mortgage. If you are approved, it will be for a fraction of the purchase price. Most likely, you’ll be flat out refused, since you have not yet proven your long-term connection to the country and they see you as a risk. [Read: Available visas and residence permits for Croatia]

Banks will always prefer permanent residents and Croatian citizens when issuing a mortgage. The exception would be for EU nationals, who are technically supposed to be treated like Croatian citizens across the board. There are some banks that will lend to EU nationals as long as they can prove they are getting a regular salary, whether that be in Croatia or in their home country.

#10 You can choose your repayment schedule

With regards to your repayment schedule, you have two options. You may repay your mortgage loan in equal monthly annuities/rates or in annuities with a gradual increase over four repayment periods. These options depend on your bank and its policies.

Some banks will even let you choose your monthly payment due date, meaning you can decide to pay for it on the fourth day of the month, for example.

Have you received a mortgage in Croatia? What was your experience like?

View our other Croatia property articles

Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.

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