Loan for Foreigners – How to Purchase Real Estate in Croatia

Sun drenched shores, mystical forests, picturesque little towns, sights that simply take your breath away. 

Where can you find all this? In Croatia, of course! This small Central European country has become a true magnet for all those seeking their piece of Adriatic heaven.

The real estate offer is abundant, and the purchase process is quite simple for all EU residents, so one just needs to take care of the financial aspect. And just like the locals, the foreigners also seek real estate loans. However, there are lots of complications when a foreigner seeks a loan in a foreign bank to purchase real estate in Croatia. Therefore, many Croatian banks offer real estate loans for EU residents!

So, you’re also thinking about purchasing real estate in Croatia and you are not sure where to begin? Worry not, we will tell you everything you need to know!

Loan for foreigners in Croatia

Real estate in Croatia has become much more accessible to all EU residents, mostly due to Croatia entering the EU and Schengen.

What does this mean? Whether you are looking to purchase an apartment or a holiday home, if you are a resident or a company located in the European Union, the same purchase conditions apply for you and for the locals. And what about finances? Let’s see what can be done.

Real estate loan for foreigners (EU residents) can be obtained from Croatian banks when purchasing:

  • Residential real estate – apartment, house or real estate under construction (yard included)

  • Holiday home – house or apartment

  • Parking garage, parking spot or storage (along with real estate).

Most banks will also provide loans for building land purchase, residential area restoration and works on the yard. Other properties, such as forests, fields and real estate in special areas, fall into a separate category and are regulated by different laws.

Croatian banks – housing loans for EU residents

Housing loans can currently be obtained from these Croatian banks:

Keep in mind that banks such as PBZ offer housing loans for eurozone (EZ) residents. This means that only residents from countries that have Euro as their official currency may obtain such loans (for example, Hungary and Sweden are EU members, but not eurozone members). These banks will have special requirements: having regular income in Euros, having a residence in an EU country and the country having introduced Euro as its currency. On the other hand, banks such as OTP expand their housing loan offer even on EEA area residents.

Repayment period, minimum and maximum loan amount and the interest rate all depend on the bank. The exact information will be given to you from the bank, even though some of them have online calculators which will give you an estimate.

Keep in mind that loans often include collaterals. Banks use these to insure themselves in case you are not able to repay them, so they will probably ask you for a guarantor, life insurance, wage garnishment and a promissory note, mortgage or some other collateral. Some banks will want you pay a certain amount of the real estate cost yourself, while they cover the rest.

How to get a loan for real estate in Croatia?

If you have set your eyes on a specific real estate in Croatia, the first step towards getting the loan is to check your level of creditworthiness. There is no loan pre-approval in Croatia and you cannot receive the financial resources first and then select the house or apartment. In other words, you must initiate the purchase process even though you don’t know if you will receive the money from the bank.

However, once the bank says you are creditworthy, the fun part may begin: you may select your dream real estate in Croatia! You probably already know what kind of real estate you want (a house, an apartment or an entire property) and which style you prefer (modern new construction or a charming old stone house). The best thing you can do is to contact a real estate agency in Croatia. They will be glad to help you find something that will be to your liking. Cooperating with real estate agencies has many other perks. You will also get all the information you need on communicating with banks, finding contractors etc.

When applying for a loan you must also deliver a purchase pre-contract, which marks the third step in this housing loan journey. Some banks will also seek real estate cost evaluation. For some banks this will be free service, but others will ask you to cover the costs.

Then you must also secure one of the collaterals which will be required by the bank. The most important thing is to secure them in Croatia – a signed statement or a life insurance obtained in any other country will not be valid.

And in the end, all that is left to do is wait for the bank’s response just a liiiitle bit more!

Business relationship setup

In the end we must mention one last thing. Any foreigner who wishes to establish a business relationship with the bank, whether it's for a loan or something else, must bring them the following documentation:

  • Personal identification document
  • Document stating the address of residence
  • Residence permit (if such exists)
  • Personal identification number
  • Foreign tax number
  • Proof for establishing business relationship (certificate of ownership, sales contract, contract of employment etc).

So, please do not go into the bank without these documents because you will be sent out to get them and come again! :)


Oh my, this was a lot of information, right? Well, we hope we have answered all the questions you might have, but if there is anything else, we are always at your disposal!

 

See more information in the leaflet below

Leaflet - housing loan for EU citizens residing in the EU