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BUSINESS IN SHORT

No loans for foreign housing

INCREASING real estate prices in Slovakia have caused some Slovaks to look for housing in border regions of neighbouring countries, especially Austria and Hungary. However, if they lack the cash for the deal, buyers will not be able to use the standard mortgage loan. Slovak law allows a person to use only Slovak real estate as collateral for a loan.

INCREASING real estate prices in Slovakia have caused some Slovaks to look for housing in border regions of neighbouring countries, especially Austria and Hungary. However, if they lack the cash for the deal, buyers will not be able to use the standard mortgage loan. Slovak law allows a person to use only Slovak real estate as collateral for a loan.

According to the financial daily Hospodárske Noviny, potential buyers would have three options if they do not have the cash. They can take out a consumer loan, (inevitably at higher interest rates); they can get a euro-mortgage loan or they can take out a housing loan from a foreign bank.

Local banks would be happy to offer loans for foreign real estate but the law forbids it.

“We would welcome a change in the legislation,” said Ľuba Foltánová of VÚB bank.

Finance Ministry spokesperson Ján Onda told the daily that the ministry has no plans to revise laws to enable banks to provide mortgages to purchase housing abroad.

“For the time being we want to support construction in Slovakia,”said Onda.


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