Financing: how to pay for a house by the sea

The most common mistake made by Czech buyers: "I'll just take a standard mortgage." You won't be able to. A Czech bank cannot accept foreign real estate as collateral. because it would be unable to enforce it in case of a problem. There are three realistic options.

1. Mortgage secured by real estate in Czechia

Most common solution: so-called American mortgage (non-purpose loan with collateral) or purpose loan with collateral of another of your properties in the Czech Republic. The bank will take a lien on your Czech apartment/house and does not care that you are using the money to purchase property in Croatia.

• Advantages: Czech environment, Czech rate, no paperwork in Croatia; in Croatia you act as a cash buyer (better negotiating position).
• Disadvantages: you need a property in the Czech Republic with sufficient value; an American mortgage typically has a rate ~1-2 percentage points higher than a standard mortgage and a shorter repayment term.

2. Mortgage with a Croatian bank

Some Croatian banks (typically large groups such as Zagrebačka banka/UniCredit, PBZ/Intesa, Erste, OTP) offer loans to non-residents from the EU, secured by the Croatian property being purchased. However, expect a conservative approach: LTV usually max. 50-70%, proof of income (they often require income in euros or stable employment), complete property documentation (hence no unauthorised construction) and longer approval times. Rates are above the level you are used to from the Czech Republic.

3. Cash (and its combination)

Most Czech purchases in Croatia are actually funded from own resources, selling another property, savings, corporate dividends: often combined with a smaller loan in the Czech Republic. For developer new builds, it is sometimes possible to use the developer's instalment schedule during construction.

Practical payment details

• Currency: Croatia uses the euro (since 2023). Purchase prices, deposits and taxes are in €.
• Money transfer: from a Czech bank via standard SEPA; for larger amounts, compare the bank's exchange rate with that of currency specialists (the difference on 200 000 € can easily amount to tens of thousands of CZK when converting from CZK).
• Storage: Send the purchase price via a lawyer's or notary's escrow account or against registration: never pay the full amount in advance to the seller's account.
• Proof of funds origin: When receiving a large sum, a Croatian bank may request AML documentation, have it ready (property sale in the Czech Republic, statements, etc.).
• Bill in Croatia: Not required for purchase, but useful for utilities and fees; OIB plus passport suffice to open an account.

Comparison of routes

Not sure which option makes sense in your situation? Contact us via the form. We'll provide free, unbiased advice with no commission interests.