MKB Unionbank (MKBU) started providing mortgages to foreign citizens as of June 7. The mortgages are for up to 100 000 euro and only available in this currency. The loan term is 20 years.

The bank said its new service was prompted by the growing foreign interest in the Bulgarian real estate market. With this, MKBU is financing purchases of houses and apartments.

“The surveys showed that the Bulgarian mortgage market is becoming more and more attractive for foreigners. Besides the traditional big interest in real estate purchases in Bulgaria from UK citizens, we are expecting increased demand from Austria, Germany, Spain and other European countries,” said MKBU managing board chairperson and CEO Maria Ilieva.

She said that the quality of Bulgarian property was improving and the trend for higher prices was also being maintained. In her opinion this was the reason for the growing mortgage market. “This is why MKBU decided to start mortgage lending to foreigners,” Ilieva said.

The loans are available to all foreign citizens, with some restrictions to citizens of Iraq, Iran, Zimbabwe and some others, MKBU public relations manager Borislav Jordanov told The Sofia Echo. In general, MKBU does not have restrictions connected to nationality, Jordanov said. The bank expects interest in the new mortgage product to be mostly from the EU countries UK, France, Spain and Germany.

In 2006 about one third of real estate deals involved foreigners. According to data of Ministry of Justice Registry Agency, more than 90 000 of the real estate contracts signed in the previous year were with foreigners, and the Bulgarian National Bank’s statistic of incomes from sales of properties to foreigners were 2.2 billion leva.

MKBU is the only bank in Bulgaria that represents the German bank group Bayern LB. The European Bank for Reconstruction and Development owns six per cent of MKBU and tprivate shareholders 34 per cent. Assets as of end April were 700 million leva, with record growth of nearly 40 per cent in comparison to the same period in 2006. Growth in loans was more than 40 per cent, reaching over 400 million leva.

In addition, UniCredit Bulbank credit centre sales specialist Valentina Alexandrova told The Sofia Echo that UniCredit Bulbank was currently working on a new product connected to mortgages for foreigners, which should be ready in about six weeks.

United Bulgarian Bank is offering its customers, citizens of the EU, US and Canada, a long-term loan for purchasing real estate. The client needs to have legitimate income, sufficient to cover the mortgage instalments and the interest. The person taking out the loan has to be older than 23 and must be 65 or younger on the date of the final payment.

First Investment Bank is also providing mortgages to foreign citizens but without nationality restrictions. The loan is available in leva, euro or US dollars and has a maximum term of 240 months.