In recent years, Bulgaria has attracted the attention of foreign investors and homebuyers thanks to its stable economy and favorable mortgage lending conditions. As of October 1, 2024, new regulations have come into effect to stabilize the market and reduce risks for banks and borrowers. Let’s explore the opportunities available for property buyers in 2025.
Key Changes in Mortgage Lending
Loan-to-Value Ratio
Banks now offer mortgage loans of up to 85% of the property value. This reduces risks for the financial system and lowers the debt burden on borrowers.
Debt-to-Income Ratio
Monthly mortgage payments should not exceed 50% of the household’s total income. This measure is designed to prevent financial difficulties for borrowers.
Maximum Loan Term
The maximum mortgage term is set at 30 years. However, most borrowers aim to repay their loans within 15-20 years.
Mortgage Conditions for Foreign Citizens
Bulgarian banks actively offer mortgage loans to foreigners looking to purchase property in the country. However, the terms may be slightly stricter compared to local residents.
- Loan currency: Euros or Bulgarian lev.
- Loan amount: Covers 60–70% of the property value.
- Loan term: From 5 to 20 years.
- Interest rate: From 7.5% per annum.
- Borrower’s age: From 21 to 60 years (men), up to 65 years (women).
- Early repayment: Possible, but may incur a penalty of up to 5% of the remaining loan balance.
Additional Costs When Applying for a Mortgage
Borrowers should consider additional expenses when obtaining a mortgage loan:
- Mortgage application fee: €30–75.
- Property valuation: €50–150.
- Mandatory property insurance: €100–300 per year.
- Borrower’s life insurance: €100–300 per year.
- Account maintenance fee: Up to 0.5% of the principal amount.
- Legal fees and notary registration: €30–50.
Bulgarian Bank Offers for Foreigners
UniCredit Bulbank
- Loans up to 70% of the property value.
- Term up to 20 years.
- Interest rate from 7.5%.
- A local representative in Bulgaria is required.
- Mandatory property insurance.
Alfa-Bank
- Mortgage up to €200,000.
- Interest rate 3.9% in the first year, then 7.1%.
- Financing up to 50% of the property value.
DSK Bank
- Loans up to €100,000.
- Interest rate 7% per annum.
- Term up to 20 years.
Investbank
- Interest rate 9.9% per annum.
- Financing up to 70% of the property value.
Bulgarian-American Credit Bank
- Interest rate from 14% per annum.
- Term up to 15 years.
- Financing up to 50% of the property value.
Mortgage Application Process for Foreigners
- Choosing a property – The property is used as collateral for the loan.
- Preliminary agreement – Signed with the seller, specifying the price and transaction conditions.
- Property valuation – Conducted by independent experts.
- Signing the loan agreement – After bank approval.
- Mortgage registration – Notarization and registration in the Land Registry.
Conclusion
The new banking conditions and mortgage programs in Bulgaria make the real estate market more predictable. Foreign buyers can take advantage of mortgage offers but should consider additional costs and bank requirements. Nevertheless, purchasing property in Bulgaria remains a profitable investment and a comfortable living option.
