Arranging your non-resident mortgage in Slovakia

Many observers consider the Slovak Republic to be the most attractive investment destination in the region. It is the fastest growing and most dynamic economy in Central Europe.

Slovakia will adopt euro ahead of any of its Central European neighbours (January 2009) The recent radical and aggressive reform process covering areas of tax, the labour market, healthcare, the pension system, and public spending has been highly praised by international institutions and investors. Of particular importance is the new flat tax rate of 19% for both individuals and corporations.

The maximum loan to value (LTV) available at present is 70% although we have good reason to believe this may increase to 85% in 2006-2007. Given that rental yields on newly built apartments are around 6-8%, your properties should generate a relatively small, but regular income throughout the lifetime of the investment.

Mortgages are available in both Euros and Slovak Crowns. There is no standard mortgage term in Slovakia and repayment mortgages can be from 5 to 20 years. Interest only mortgages are not currently available.

It is also not possible to borrow on the basis of future rental income unless the property has been rented out for a number of years, and in this case, the maximum LTV is 50%.

Mortgages are available for purchases of houses, apartments, buildings and freehold land, modification of completed building are available for individuals.


Type of loans available:

·        Capital repayment mortgage
·        Fixed rates are available for up to 10 years.
·        Maximum Loan to Value: 70%
·        3 million Euros or equivalent in other currency
·        20 years (not more than 65 years old at maturity)


Interest Rates:

·        Depends on the currency and type of product
·        Rates starting from 4.99% in Euro and 5.50% in Slovakia Koruny

You will be expected to prove ability to pay (i.e. wage slips from the last 3 months and bank statements of the last 6 months or, if you are self-employed, copies of your last 3 years accounts (with an auditor's stamp) and copies of you last 12 month's business bank statements and your last 6 months personal bank statements). Income received from renting the property will not be taken into account by Slovakian banks.

Your Loan is based on your joint net take home pay. All your existing liabilities including any mortgage/rent payments, personal bank loans, credit card payments etc together with your proposed Slovak mortgage payments must not exceed 35% of your net monthly income.

Before you enter into any property purchase you should consider the following things:-

• Appoint a good lawyer who can carry you through the process till completion
• Only buy what you can afford. Do not overlook Foreign Currency Fluctuations and all closing costs.
• Make sure you have a good Idea of what mortgage you will be able to secure prior to entering into any contract to buy
• Remember that when taking out an overseas mortgage you will have to declare full details and your assessment will be made on the affordability to pay and not income alone