By Anna Grybel and Robin Bowman

The mortgage lending in Slovakia is still in relative infancy. The key measure of mortgage penetration, the mortgage debt to GDP ratio, was only 9.6% in 2006.

But, while this is low by European-wide standards, it is still higher than in Poland (7.4%) or Bulgaria (7.2%), it is much lower than the EU-15 average of 49% in the same year. So, it's really a measure of great potential.

The mortgage market in Slovakia is small but continues to grow rapidly due to low interest rates and attractive lending criteria.

Currently the base interest rate in Slovakia is a low 4.25% (compared to 5.25% in Poland for example).

In 2004, mortgage lending grew by 82% and then slowed to 40% in 2005 and 32% in 2006. The amount of approved mortgage loans increased from SKK39.6 billion in mid 2004 to SKK87.9 billion by the end of 2006. This translates into 45,605 mortgage contracts in mid 2004 and 85,366 by the end of 2006.

Despite the solid growth, Slovakia still has low volume of mortgages at around €4.1 billion as of the end 2006.

The following banks currently offering mortgage products to the local market: Slovenska Sporitelna, Tatra Bank, VUB, Istrobanka, HVB Banka Slovakia, UniBanka, Dexia banka Slovensko, OTP Banka, Ludova banka.