How to get a mortgage loan in Croatia: Guide for 2024

Stone apartments in Split's Diocletian's Palace in Croatia

UPDATED: 21/09/2022

While living in Croatia, you may make the big decision to purchase a home and discontinue renting. To purchase a home, most people must acquire a mortgage loan from a Croatian bank to fund their home purchase. A mortgage loan is called hipotekarni kredit or hipoteka.

Mortgage loans usually have lower interest rates and longer repayment periods than consumer credit so they can be more cost-effective.

A home loan is a huge long-term obligation, and you have to be well informed about it before acquiring it. The process of applying for a mortgage within Croatia does hold similarities to other nations. However, there are certain differences one should be aware of before getting started.

In this post, we cover:

The facts are these…

How to get a mortgage loan in Croatia

#1 Creditworthiness assessment

Every lender will conduct a creditworthiness assessment as a first step. It is called procjena kreditne sposobnosti in Croatian. The lender can approve the home loan only if they are sure that you will be able to pay it off.

The lender will:

  • Examine your financial situation (assets and debts)
  • Examine the value of the real estate you wish to purchase
  • Request your income statements
  • Request proof of your intention to purchase, which is proven by a contract with the owner

It is important to know that a lender will likely reject your application if:

  • You want a mortgage to cover 100% of the property cost
  • Property you wish to buy is located outside of Croatia
  • You do not hold legal residence or have a registered address in Croatia

There are certain factors that may complicate an application OR limit your options, like:

  • Not being a Croatian citizen
  • Only having foreign income

If you are an EU/EEA member and you think that the lender discriminated against you based on your non-Croatian citizenship, you can:

  • Contact the bank (specifically, the complaints office) and ask for a written statement of all reasons for rejection OR
  • Contact FIN-NET and ask for advice and help. This is a network for out-of-court settlement of financial disputes.

Learn about how creditworthiness is calculated in Croatia in this post.

#2 Comparison and evaluation of offers

Before you decide on a lender, make sure you collect offers from several lenders, as the terms can vary wildly from bank to bank.

Every lender is obligated to provide you with an ESIS –  Europski standardizirani informativni obrazac (European standardized information form) together with the offer for the mortgage loan.

[Read: 15 Croatian banks and who they will consider for a home loan]

ESIS includes the important information about the mortgage, such as:

  • Loan amount
  • Loan duration period
  • Interest rate type
  • Total amount paid once repayment is fulfilled
  • Effective interest rate
  • All expenses you have to pay regularly or on a one-time basis
  • Number of payments, frequency of payment, and amount of loan rates
  • Information on the prepayment terms and prepayment fees
  • An explanation of how changes in exchange rates could affect your mortgage loan (if your loan is paid in a foreign currency)

All mandatory and optional information that may be shown in ESIS is available here.

After you collect several offers from different lenders, think about all the pros and cons of a single offer. Do not hesitate to ask the lender for ESIS in case they did not deliver it together with the offer.

If you are receiving income from a Croatian bank account, it is possible that the bank will give you the most favorable terms.

[Read: Do I need to open a bank account in Croatia?]

Check out our bank comparison of the top banks in Croatia for some approximate mortgage interest rates.

#3 Offer examination period

The lender is obliged to give you a period of at least seven days to consider the offer. It is usually a 15-day period.

The examination period is usually used for:

  • Considering the offer and deciding whether it is right for you
  • Canceling the loan agreement if you have already signed it
  • Combination of both

To be certain of your rights, check with the lender what the examination period includes because it can differ from country to country and from one bank to another.

If you are a non-EU citizen from a country with a reciprocity agreement, then the bank may not consider your application until you have been approved by the Ministry of Justice to purchase the property.

If you’re not sure if your country has reciprocity, read this post.

#4 Repaying the mortgage before time

You should know that it is usually possible to repay the whole mortgage or just a part of the debt before the term concludes. Doing that is positive because you will not have to pay as much interest, lowering the overall cost.

You can also renegotiate your rate once you develop a strong history of making payments on time.

It is important to note that the government strictly forbids any banks from charging penalties for paying off your mortgage early.

#5 Mortgage insurance

When getting a mortgage, you have the option to insure the loan. Mortgage insurance is valuable when unforeseen circumstances arise that affect your ability to pay back your debt on time.

An accident, a fatality, a serious illness, or job loss can happen to anyone. With mortgage insurance, you can protect yourself in cases such as these.

Some lenders may require mortgage insurance. As part of the mortgage application, the lender can prepare an insurance policy along with your mortgage agreement. However, you do not need to purchase this insurance through the same bank as the loan. You can seek out better offers from other insurers.

If you’re considering getting a mortgage loan, be sure also to check out the 11 things you must know about getting a mortgage.

View our other loan articles

Zakon o stambenom potrošačkom kreditiranju
Odluka o sadržaju i obliku u kojem se potrošaču daju informacije prije ugovaranja pojedine bankovne usluge
Krediti by Središnji portal za potrošače

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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