A home loan is the biggest financial decision most households make. This page explains the rules, the numbers and the steps — without banking jargon and without advertising particular products.
Current as of July 2026 · Bulgaria joined the eurozone on 1 January 2026The regulatory framework
In force since 1 October 2024 for all new and renegotiated loans secured on residential property. Banks may not breach them — this is the ceiling every piece of financing has to fit inside.
The bank lends at most 85% of the property's valuation. The remaining 15% minimum is your own contribution — and it is calculated on a licensed valuer's figure, which can come in below the agreed price.
All monthly payments on obligations — the new mortgage plus existing loans, leases and credit cards — cannot exceed half of your net monthly income.
The loan agreement cannot run longer than 30 years. A longer term means a lower monthly payment but more interest paid in total — the balance is an individual one.
The numbers today
Since 1 January 2026 Bulgaria's interest rate environment has been directly tied to the decisions of the European Central Bank. According to BNB statistics from the start of 2026, the average interest rate on new home loans is around 2.4–2.5%, and the average annual percentage rate of charge (APR) around 2.7%. These are among the lowest levels in the EU, but your specific offer depends on your profile: income stability, credit history, the size of your own contribution and your relationship with the bank.
Most loans in Bulgaria carry a variable rate: a reference index (usually based on indicators published by the BNB) plus a fixed margin. If the index rises, your payment rises. Some banks offer a fixed rate for the first 3–5 years, after which the loan moves to a variable one.
Your own funds
The most common mistake first-time buyers make is to budget only for the deposit. The real amount of your own funds is larger, because the costs of the transaction are paid in cash and are not covered by the loan:
| Cost | Indicative size | Note |
|---|---|---|
| Own contribution | min. 15% of the valuation | A BNB requirement (LTV ≤ 85%). If the valuation comes in below the agreed price, that difference is yours to cover too. |
| Local acquisition tax | ~3% of the price (Sofia) | Set by the municipality; in most large municipalities it is between 2.5% and 3%. |
| Notary and registration fees | ~1–1.5% | Notary fee per the tariff, plus a 0.1% fee for entry in the Property Register. |
| Bank costs | usually up to 1% | Property valuation, arrangement fees, establishing the mortgage, compulsory property insurance (and often life insurance). |
| Agency commission | by agreement (often 2–3% + VAT) | If you use an agent on the buyer's side. |
The process
Before you look at properties. This works out how much loan your income supports at DSTI ≤ 50% and what deposit you have. This is the step FinHome helps you take with a FinCity credit adviser — free and without commitment.
At least 2–3 banks. According to BNB data, more than half of new mortgage loans are now concluded with the involvement of a credit intermediary or adviser — who compares the market for you and is usually paid by the bank, not the client.
The bank checks your income and credit history (Central Credit Register) and confirms an amount. With it you negotiate from a position of strength.
A licensed valuer appointed by the bank values the property; the bank's lawyers check the title documents and any encumbrances.
Usually with a deposit of around 10%. Always include a clause returning the deposit if the bank declines financing.
Signing the loan agreement, completing the sale before a notary, registering the mortgage and releasing the loan to the seller.
Preparation
If you are married, at least one spouse is under 35 on the date of the loan agreement and the home is the family's only one, the interest on the first BGN 100,000 (or the euro equivalent) of the principal is deducted from your annual tax base (art. 22a of the Personal Income Taxes Act). It is claimed with Appendix No. 10 to the annual tax return — with the interest of a loan's early years, that is a real few hundred euros a year.
What to avoid
General rules are one thing; your specific purchasing power is another. Request a free preliminary budget assessment and a conversation with a FinCity credit adviser — no documents and no commitment.
Work out your budgetThe information on this page is educational and reflects publicly available data and regulatory requirements as of July 2026. It is not financial, legal or tax advice, and it is not a recommendation for any particular credit product. FinHome is neither a credit intermediary nor a credit institution. Specific terms are set by the relevant bank after an individual assessment.
