The latest European mortgage news and products, as compiled by our researcher, Anna Grybel-Kloc.

Poland

In Poland, in general there is a continuation of the trend seen at the end of 2008. Banks are still applying strict lending criteria, especially for those borrowing in foreign currencies. The applicant

In the last months a few banks have eased lending criteria for the local market and are offering higher LTVs - however, it is too early to say whether this indicates a general trend or one that will be extended to foreign borrowers.

Non-residents have still limited options as currently only three banks actively lend to them and their lending criteria are strict. Agnieszka Zbroch from redNet Finance reports that it is possible to apply to other Polish banks for a mortgage, but in practice they hardly ever approve non-residents, or if they do, they provide only very unattractive offers.

Currently, 70-75% LTVs are available for non-residents for 25-30 years (depending on the age of the borrower). Interest rates for Polish zloty vary from 5% in Deutsche Bank to 10% in GE Money and 12% in Metrobank on average.

As with the local market, banks prefer to lend in Polish zloty, but mortgages in foreign currencies can be obtained only if a borrower has an income in a foreign currency. Interest rate for mortgages in Swiss francs are 4.5% and for euro ones, 5.5% on average.

Currently, investors, who are not employees only realistically have a chance of being approved by Metrobank.

Czech Republic

We haven't seen any significant changes in the mortgage sector in the first months of 2009. The tightening of mortgage criteria, which started at the end of 2008, continued into this year.

Banks in Czech Republic still lend, but they currently require higher deposits of between 15 and 25%.

Despite cuts in the base rate from 3.5% in October 2008 to 1.5% in May 2009, mortgage interest rates haven't dropped significantly.

Star Capital Finance reports that currently, offered mortgage interest rates vary between 5% and 6% (5.5% - 6.5% in 2nd half of 2008).

The terms and conditions above are offered both to the local market and non-residents.

Mortgage lending in Czech Republic has dropped significantly since the crisis hit the country, which is mainly a result of banks applying stricter criteria, but also the local market is less willing to make long-term financial commitments and demand for finance has fallen.

There are no signs from Czech banks that mortgage finance will see any improvements in the coming months.

Slovakia

The mortgage market started to deteriorate markedly at the end of 2008 along with the worsening economic environment and this trend has continued into the first half of 2009.

Banks have not only started to apply less favourable lending conditions and terms like lower LTVs, but have also become more careful in financing certain projects. The evidence is that the luxury sector, which suffers from oversupply, is the most unattractive sector to banks currently.

70% LTVs are standard for both local and foreign borrowers for up to 30 years (previously 100% for locals and up to 90% for non-residents were available). Interest rates depend on the fixed period and start from Euribor + 2.5% (approximately from 4.99%).

Star Capital Finance, a mortgage brokerage company operating in Slovakia, believes that given the current economic environment, we should not expect any improvements in the mortgage sector in the foreseeable future.

For those investors who earn in euros the big advantage of mortgages in Slovakia is the euro adoption on 1st January 2009 as the currency exchange risk vanished.

Romania

Stefan Willems from Easy Credit reports that mortgage lending to non-residents remains very limited in Romania, but is loosening slightly. Currently there are very few lenders that accept applications from foreigners who generate income abroad.

For non-residents a repayment mortgage product is offered for up to 30 years (the last payment can't be later than the age of 70). 80% LTV is available for UK clients and 85% for Irish applicants as their income is in euro.

The interest rates are 7.5%-8% on average.

In terms of lending criteria, 80% of foreign income from salary is taken into consideration and debt to income ratio is on average 50%. That means that 50% of income is required to cover both foreign and future Romanian instalments.

For pre-approval, documents can be provided in English, but some documents might be subject to translation for final approval.

The fee for granting a mortgage is 2%.

Bulgaria

Mortgage lending to non-residents in Bulgaria has deteriorated significantly in the last few months. Products for non-residents is highly limited and Bulgarian banks don't finance stage payments anymore.

Currently, there's only one bank that advertises mortgages for non-residents and its offer is up to 80% LTV for between 5 and 25 years with interest rates of 6% in the first year and then 6M Euribor + 6.5%.

However, Dave Moore from Balkan Legal & Finance, a mortgage brokerage company operating in Bulgaria, reports that it is extremely difficult to obtain this product. In fact, the bank hasn't granted any mortgages to non-residents for several months.

Because of the current economic environment, we're not likely to see any major improvements in mortgage lending to non-residents in Bulgaria in the next 12 months.