Get your new home in Bulgaria financed through Homevest

There are around 1 million Bulgarian citizens living and residing away from their home country and the vast majority of these work and live in Spain, Germany, the UK, France and Italy. If you belong to this select group and are looking to buy a home back home in Bulgaria, read on to get an understanding of available mortgage options. If you are not, but have an itch to relocate or buy a holiday home in Bulgaria, you’ll also benefit from reading on.

Nicholas Vinberg
Written by Nicholas Vinberg
Published at 2022-12-01T18:17:37Z
Last updated at 2023-07-25T23:36:35Z
Readtime 5 minutes

The best day to get on the Bulgarian property ladder was yesterday, the second best is today…

On average, the value of residential real estate in Bulgaria increased by over 10% in 2021, mainly driven by an even greater increase in prices in the biggest cities: Sofia, Plovdiv, Burgas, and Varna. Even though having witnessed this double-digit growth, there are no signs of a drop in demand. As a matter of fact, property demand has seen a 20% uptick since the beginning of 2022.

Buyers from Western Europe are increasingly looking at buying Bulgarian properties, whilst the prices still remain decent. If you are a Bulgarian citizen or other foreign national looking to buy property in Bulgaria you would most likely gain from comparing financing options. Homevest is here to help you explore mortgage options and put you in touch with banks, from the comfort of your home.

Get in touch, or continue reading for an overview on the mortgage terms in Bulgaria when applying from abroad or with a foreign currency income.

Key mortgage terms in Bulgaria when buying from abroad

Terms for non-resident applicants tend to be more strict than for local property buyers. Each case is however assessed on an individual basis, and by being properly prepared for what banks will require from you, your chances of obtaining favorable terms increase.

The differences in mortgage terms for non-resident applicants include:
  • Having to settle for a 25 year maximum repayment period even though local buyers can get 30 years.
  • Requirement to have a higher saved deposit, around 30% of the property price. 
    • Some lenders might be more lenient and only require a 25% deposit, and Bulgarian nationals are more likely to be eligible for this.
  • Minimum loan amount for applicants from abroad is capped at 50,000 euro, with no maximum amount stated, due to the more complex processes and extra time banks need to spend on non-resident applications.

Other bank requirements include:
  • Upon applying, Bulgarian lenders assess your post-mortgage affordability and enforce a maximum debt-to-income level of 45%. 
    • This means that after getting the new mortgage, your monthly loan repayments cannot exceed 45% of your total monthly income, leaving a minimum of 55% monthly free cash flow at your disposal as an additional risk buffer.
  • Most lenders won’t underwrite cross-border mortgages for which the repayment time exceeds your 70th birthday. 
    • This means that in order to get a 25 year repayment period, you cannot be older than 55 years.
  • Self-employed applicants from abroad can apply but will face extra scrutiny and have to provide audited tax returns, company income statements, and personal bank statements from the past three years upon applying.
  • Property insurance is a must-have, but life insurance in Bulgaria remains at the discretion of the borrower to decide if necessary.

This might sound complex, but Homevest is at your disposal and can help you understand requirements, prepare your application and apply for mortgage financing with banks. Get in touch if you would like to get the process started from the comfort of your home, today.

Types of mortgage deals in Bulgaria available for non-resident applicants

When getting a mortgage from abroad, you might be surprised that there exist a wide set of options:
  • Bulgarian mortgages will be denominated in either: 
    • Euro, priced with the Euribor reference rate,
    • Bulgarian Lev (BGN), for which interest rate follow the Bulgarian reference rate, dubbed Average Deposit Rate (ADI).
  • Both traditional mortgage repayment and interest only loans are available. 
    • For traditional repayment mortgages, you will have the option of choosing equal monthly installments or decreasing monthly installments.
  • The majority of Bulgarian mortgages follow a variable interest rate. 
    • These are tied to the Euribor or ADI base rate with an additional fixed spread that currently ranges between 2.5-3.5%.

In addition, existing property owners living abroad might also find it interesting to know that mortgage refinancing is also available with most banks even though not currently living in the country.

If you have found a property in Bulgaria you would like to get financed or want to know your options to prepare for your upcoming property search, please leave your information and our team will be glad to help you.

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