How to Get a Mortgage in Slovakia - A Guide for Expats
Discover how to get a mortgage in Slovakia as a foreign citizen, including guidelines to increase your chances for approval.
Conditions for Foreign Citizens to Obtain a Slovak Mortgage
Are you a foreign citizen looking to apply for a mortgage in Slovakia? If yes, this guide is for you. Get answers to the most common questions foreigners have when applying for a mortgage. We’ll share information on:
- Mortgage eligibility criteria
- Age requirements
- Residency requirements
- Home loan provider screening
- Proving financial standing
- Credit evaluation for a mortgage
- When is the best time to apply
- How to apply
- Required documents
- How to find a mortgage broker
We’ll also share free tools to help you easily calculate your mortgage, including monthly and annual installments. Read on to start your research, and learn how to increase your chances of getting a mortgage in Slovakia.
1 - What are the age requirements to get a mortgage?
The minimum age to apply for a mortgage in Slovakia is 18 and above. Each bank and home loan provider then has age limits, which sometimes vary from one institution to the next. These limits usually make getting a mortgage in retirement age extremely difficult or near impossible.
However, the home loan process is possible even in retirement by stipulating mortgage repayment by a certain age. For example, say a home loan applicant is 60 years old. To get home loan approval, they might stipulate the mortgage repayment by an age between 67 to 70.
This is the typical age banks and loan providers expect borrowers to complete their mortgage payments. The usual range of home loans in Slovakia is from 18 to 67 years.
2 - What are the residency requirements?
In general, a foreign citizen can apply for a mortgage in Slovakia if they have a valid residence permit. For EU nationals, temporary residency status will suffice. Third-country nationals require permanent residency to apply for a mortgage.
However, banks and home loan providers can have their own residency requirements. For example, many banks will allow a foreigner with permanent residency to apply. Only some accept applicants with temporary or long-term residency.
Also, it is possible in some cases for EU citizens to apply for a mortgage without residency. This can include applicants who have the ability to work freely in Slovakia without a work permit. However, the applicant must earn income within the Slovak Republic, or foreign income as an employee (not from entrepreneurship).
All home loan applicants must possess a Slovak address, whether from renting or owning property. The majority of banks will also require a Slovak ID number (rodné číslo), although this changes from bank to bank.
3 - How do I prove financial standing?
Whether it’s a Slovak or a foreigner applying for a loan, the conditions to prove financial standing remain the same. Home loan applicants must prove first and foremost that they can fulfill monthly installments.
Banks thus appraise applicants on employment status, income, and capacity to meet the down payment. The home loan provider will then take into account the total mortgage amount, maturity, and interest rates.
In general, it’s advisable that you have at least 20% of the price of the property in savings. This will give you a better chance of getting a home loan due to current regulations of the NBS. Regulations restrict the volume of home loans banks can provide above this limit on a quarterly basis. Limits cannot exceed 90%, although these loans tend to go only to the most creditworthy.
To assess financial standing, Slovak home loan providers commonly recognize the following types of revenue:
- Salary from employment,
- Business income,
- Pension (as well as disability, widow and orphan pensions),
- Revenue of current or future lease agreements,
- Parental allowance,
- Alimony,
- Foster care benefits.
Note: If you don’t have savings or another property as a security, it is still possible to get a home loan. However, you will need to apply for a non-purpose consumer loan to finance the difference in the purchase price.
4 - What is involved in creditworthiness evaluation?
In addition to the assessment of financial standing, Slovak banks must perform a credit evaluation on mortgage applicants. This evaluation determines an applicant’s credit rating on factors such as income, loans, credit cards, debts, etc.
Thus, consider your overall financial situation, as well as anything that can have a negative impact on your credit evaluation.
Financial events that can complicate getting a mortgage include:
- Any delays in payment installments on consumer loans;
- Arrears in social security contributions or at the Tax Office;
- Unauthorized bank account overdrafts;
- Irregular or inconsistent income over the last 6 months;
- Employment without job security (temporary employment, freelance work agreements).
Ultimately, the bank needs evidence that you are capable of meeting your loan obligations. Be sure to take into account your family budget so that you can make regular repayments on the home loan. Also, keep in mind that repayments should not exceed 40% of your monthly income.
5 - Can I apply for a mortgage if I have debt?
Anybody applying for a mortgage in Slovakia must be absent from any debtor registries. If there is any outstanding debt, ongoing foreclosure, or insolvency, loan providers will reject the mortgage application. They also tend to investigate the previous 3 to 5 years, and they only tolerate minor transgressions.
Thus, it’s important you have a good payment history on any loans or monthly installments you may have. This includes any consumer loans, or, for example, payments to mobile, internet, or TV service providers. The lender will want to see you have made payments regularly and on-time as part of their risk assessment.
6 - Does country of origin affect mortgage applications?
Beyond residency status, Slovak banks also take into account the applicant’s country of origin. Countries range from lower to higher risk categories, and include the following.
- Lowest risk countries: Slovakia, the Czech Republic, or any foreigner holding Slovak citizenship
- Low risk countries: EU and European Economic Area (EEA) countries
- Medium risk countries: Third countries with proportionally low risk from outside of the EU and EEA – USA, Canada, Australia, Russia, China
- High-risk countries: Mostly countries in Africa, the Middle East, and Asia (Oman, Saudi Arabia, Sri Lanka, Vietnam)
7 - What are the limits on Pledge Value (collateral)?
When applying for a Slovak mortgage, you have to guarantee the property against a security (collateral) asset. The higher the pledge value of the real estate, the higher the mortgage loan you are eligible to borrow.
The maximum amount on home loans is 90%, but, again, this is most often reserved for only the most creditworthy. More commonly, banks provide loans at 80% of the collateral’s value, and applicants pay the remaining 20% on their own.
8 - When is the best time to apply for a mortgage?
If you want to apply for financing exceeding 80% of the purchased property, apply at the beginning of the new quarter. This is the best time to apply to ensure banks have not already met their limits for such housing loans.
However, keep in mind the strict eligibility criteria on these mortgages. Applicants should be absent from any debtor registries. They should have sufficient and stable income, as well as permanent employment for a better chance of home loan approval.
9 - What documents do I need to apply for a mortgage?
Collecting all the legal documents to apply for a mortgage and submitting all paperwork can be time-consuming. Thus, always afford extra attention to meet the requirements of the individual bank you are applying through. Requirements can vary from one institution to the next, so double-check conditions with your specific loan provider.
In most cases, you will need at least the following documents:
- Proof of residency with one or two forms of valid identification (for example: an identity card and a passport, or a driver’s license and a birth certificate).
- Proof of income. (In most cases, the bank verifies this through the social insurance company of the applicant.)
- Tax return and confirmation the applicant has no tax arrears from the Tax Office (for SZČO entrepreneurs and freelancers only)
- Bank statement (most often covering the last six months to present).
- Real estate valuation of the established property, including the title deed.
- The purchase contract (which you must submit when the purpose of the loan is acquiring real estate, such as a home or apartment).
- A copy of the seller's identification card.
10 - Where to get assistance
One of the most common ways foreigners apply for a mortgage in Slovakia is through a broker. The mortgage broker acts as an intermediary between multiple lenders and a borrower, and receives a referral fee from lenders. Brokers also provide financial as well as legal guidance throughout the home loan application process.
Applying through a broker is popular nowadays because lenders usually offer special discounted rates to brokers. Further, brokers can sometimes negotiate loan approval when an applicant might not receive it from the bank. Hiring a broker is also an obvious choice for foreigners who don’t speak much Slovak.
However, always be wary of anything that doesn’t make financial sense in your specific case when hiring a broker. While some services like arranging building insurance are extremely helpful, they can also become costly. In some cases, it’s more cost-effective to handle some affairs yourself, or, at least, to conduct initial research for negotiations.
Try our Free, Online Slovak Mortgage Calculator
Curious to find out how much your monthly mortgage installments will be on a home loan in Slovakia? Try our free, online Slovak Mortgage Calculator to plan your finances when purchasing a new apartment or home. Use it to calculate monthly payments according to the total loan amount, down payment, mortgage amortization, and interest rate.
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