Financing Investment Property in Croatia

Hi all,
Interested in purchasing a property in Croatia. Cost E550-625K. Own deposit of 10%. It is a long-term investment as will be living there.
I understand most banks or brokers/intermediataries require an irish property as security for a loan on the overseas property-please confirm?
What financial institutions or private sector are prepared to provide a loan-to-value mortgage on a property in croatia? Many thanks. Del086.

Hi, I don't think you'll find anyone in Ireland that will finance your property in Croatia so you would have use equity releasing on an existing property (e.g. mortgage = 100,000, house value = 300,000 just increase mortgage to cover croatia property once loan to value is still less than 85%).

Thanks dobren. Unfortunately do not have an irish home to use as collateral - only cash deposit. Any suggestions as to which 'companies' provide finance for this venture?Cheers Del086.

Zagrebacka banka do mortgages.

I believe some of the Austrian Banks also lend on Croatian properties.

I have a property there, but re-financed an investment property here to fund purchase.

I did the same as Culchie - borrowed against my home here. However I just heard from the real estate agent we used that there are now mortgages available that can be secured on a Croatian property. The interest rates are very high though, and they didn't mention in the article who the bank was, maybe it's Zagrebacka

From our headquarters in Zagreb, we are writing to bring news regarding the long awaited availability of mortgages in Croatia.
After lengthy negotiations with a leading international bank in
Croatia we are very pleased to announce that we can now offer the
first mortgage facility specifically designed for international clients
investing in Croatia.
------Available over a period of up to 15 years----- 6.20% variable interest rate pegged
to the Euro ----- up to 60% of property value ----- Available for Company or Private
purchase methods---- Available to both employed and self employed clients ------
Read more about this facility in this newsletter or contact us at mortgages@croatiansun.com.

Click to expand...

BTW Culchie, I think it was you I was talking to a while back about Vila Bili around the time we were both looking at it. Did you buy there in the end? We found our dream house on one of the Elafiti islands and got the keys last October.

Del the financing in Croatia is decidedly dodgy. I got a personal loan in 2004 at a fixed rate of 8,4%, then when I was paying off the last six months as a lump was informed that I owed a penalty over and above the actual amount of repayments.

If you contact KBA Property Partners they can guide you as they've dealt with clients of ours.
They're in Lucan.

There was an announcement by the Croatian National Bank regarding mortgages and credit for foreigners on Thursday. It will be released at the start of next month in conjunction with a series of other new measures to get in line with EU guidelines. The following are critieria to be adopted in Zagreb and hopefully (esp. when the disastrous Splitska are finally sold) all banks in the country will adopt them.

1. A non-national who has been resident with a serviced bank account for a period of no less than 12 months.
2. Can place a deposit of no less than 25% of the property in question.
3. Has evidence of ability to service the credit from a notarised source in their home country that is notarised in Croatia.

It looks trickier than it is, but remember that after having an account (showing activity) for 12 months (which helps if you have a company - even shell) you enter eligibility for touristic credit, which immediately places you on the credit ladder and within a further year your credit facility will be at least 4-5 times the original borrowed amount.