For most people, buying a flat or a house is the biggest investment they will ever make. Yet many buyers spend more time choosing a kitchen than understanding financing, purchase costs, and the long-term consequences of a loan.
Before you sign a contract or reserve a property, it makes sense to understand the full financial picture. Good preparation can save you a lot of money, wrong decisions, and unnecessary stress. If you’re not yet sure buying is even worth it for you, start with our comparison of renting vs. buying.
Check your finances before you start viewing properties
Most people start their search on real estate portals. They browse listings, compare locations, and arrange viewings. Only later do they start dealing with the question of financing.
This approach often leads to disappointment. Many buyers discover that the property they like best is, in reality, one they cannot afford.
It is smarter to start with your finances. Before your first viewing, it makes sense to assess how much you have saved, check your creditworthiness, and determine the monthly instalment you will be able to repay comfortably over the long term.
How much property can you actually afford?
The biggest mistake buyers make is basing their decision on what they want rather than on what they can actually afford.
If a loan’s monthly instalment takes up too large a share of your income, the purchase can quickly become a burden. A flat is not a good investment if it puts you under financial pressure for years.
When assessing a purchase, what matters is not just how much the bank is willing to lend you. The more important question is what loan you can realistically repay long-term without major sacrifices and without putting your family’s financial security at risk.
The purchase price is not the only cost of buying property
When buyers see a listing for a flat worth €250,000, they often assume that is also the total cost of the purchase. In practice, it almost never is.
On top of the purchase price come costs such as appraisal, loan approval, notary services, insurance, and various administrative procedures. Older properties often add further costs for renovation, new fittings, or fixing hidden defects.
That is why it is important to assess the whole investment, not just the price from the listing.
Why is your own capital so important?
Your own funds are one of the key factors in financing a property purchase.
The more you have available, the easier it generally is to get a loan, and the better the financing terms can be. At the same time, a larger share of own funds reduces the total loan amount and, as a result, the total interest costs.
Even so, it is not advisable to spend all your savings. After the purchase, it makes sense to keep a financial reserve for unexpected costs, illness, job loss, or major repairs. For how much own money your specific property actually requires, see how much down payment you need to buy a flat.
A mortgage is a long-term commitment
A mortgage typically follows a person for 20 or even 30 years. That is why the decision should not be based on the lowest monthly instalment alone.
It is important to understand the total cost of financing and the differences between individual bank offers.
Many buyers focus exclusively on the interest rate. A more useful figure is often the APR (annual percentage rate), since it includes most of the important costs of the loan.
That is precisely why two loans with a very similar interest rate can end up several thousand euros apart over the long run, so compare mortgage offers before picking a bank.
New build or older property?
This is a question almost every buyer faces.
New builds usually offer more modern construction, better energy efficiency, and fewer upfront investments. On the other hand, they tend to be more expensive and are often available in a limited number of locations.
Older properties can be more affordable and are often in more established locations. However, they may require significant investment in renovation, energy upgrades, or replacing fittings. An energy renovation can also be financed with a green loan or an Eko sklad loan.
Before making a final decision, it therefore makes sense to assess the long-term cost of ownership, not just the purchase price.
What to watch out for when buying a flat: a checklist before signing
Excitement about a property can quickly cloud your caution. Before you pay a deposit or sign a contract, check the flat on paper, not just at the viewing. Most of the information is free online; the rest you get from the seller or the building manager.
1. Land registry: who owns it and what encumbers it
Viewing the land registry on the e-Sodstvo portal is free. Check:
- that the seller is really registered as the owner and whether there are several owners. All of them must sign the contract.
- whether a mortgage is registered. That is not necessarily a problem, but the contract must state that part of the price goes to repay the seller’s loan and that their bank issues a deletion consent.
- easements, bans on sale and other notes.
- a “plomba”. This means an application for registration has been filed that the court has not yet decided. Until you know what it is for, do not pay anything.
Check the extract again just before signing, as the situation can change.
2. The flat must be registered as a separate unit
Older blocks still have flats that are not registered as a separate unit in the land registry because the condominium ownership has not been set up. You can still buy one, but registering ownership is more complicated and the bank may require extra steps before approving a loan. Also check that the floor area in the building cadastre (public viewer on the GURS portal) matches the listing. A price per square metre only means something if you know which area is meant: with balcony and cellar or without.
3. Permits and energy performance certificate
For newer buildings and extensions, check that they have an occupancy permit and that the actual state matches the documentation. An enclosed balcony or converted attic without a permit may not be registered, so you could pay for square metres that do not officially exist. The seller generally has to provide an energy performance certificate, which shows roughly what heating will cost.
4. Building manager, reserve fund and planned works
In a block of flats, ask the seller or building manager for:
- the reserve fund balance and the monthly contribution,
- confirmation that the seller has no unpaid obligations to the manager and the reserve fund,
- the minutes of recent owners’ meetings. They show whether major works have been approved, such as a new roof, facade or lift, which you will also pay for.
An old block with a small reserve fund means the contribution will probably rise soon. Monthly running costs are covered in the article on the costs of buying property.
5. Deposit and preliminary contract
The deposit (“ara”) is usually 5 to 10% of the price. If you back out through your own fault, the seller can keep it. If the seller backs out, you can claim double the deposit back. So do not pay a deposit before you know you will get the loan. Check your credit capacity and talk to the bank before the preliminary contract. You can also agree with the seller that the purchase depends on the loan being approved.
6. Purchase contract and payment
- The land registry consent (“zemljiškoknjižno dovolilo”) is the seller’s statement, with a notarised signature, that you may be registered as the owner. Without it there is no registration, so make sure you receive it at the latest when you pay the full price.
- Paying through an escrow (fiduciary) account held by a notary or lawyer protects both sides: the money goes to the seller only once the agreed conditions are met.
- The contract should state the handover date, who pays the 2% real estate transfer tax, what stays in the flat and the meter readings at handover.
- File the application for land registry entry as soon as possible after signing; a notary or lawyer often does this. The order of entries matters.
Example: Maja buys her first flat
Maja finds a two-room flat for €210,000. In the land registry she sees a mortgage in favour of the seller’s bank. The contract therefore states that the rest of the seller’s loan is paid directly to their bank, which then issues a deletion consent, and the rest of the price goes to the seller through an escrow account once Maja receives the land registry consent. The building manager confirms the seller has no debts, and from the owners’ meeting minutes she learns that a roof renovation has been approved for next year. She uses that when negotiating the price.
If there are several owners, a “plomba” is registered, the condominium ownership is not set up or the property was inherited, a lawyer’s review is usually worth its €150 to €400.
Buying property is a marathon, not a sprint
A good property purchase is not the result of luck. It is usually the result of good preparation, realistic expectations, and well-considered financial decisions.
The most successful buyers are not necessarily the ones who buy the biggest or most beautiful property. Often they are the people who find the right balance between their wants, their needs, and their financial capacity.
Buying property will affect your finances for decades to come. That is why it is worth spending a bit of extra time on preparation and calculations - use FinPortal’s real estate financing calculator to estimate in a few minutes how much property you can actually afford.
Conclusion
Before you make an offer or sign a contract, check the full financial picture. Assess your creditworthiness, the amount of own funds required, the total cost of the investment, and the long-term burden on your household budget.
Proper preparation can save you tens of thousands of euros and help you make a decision that will be good not just today, but also in ten or twenty years.
Check your borrowing capacity and estimate the total cost of the purchase with FinPortal’s real estate financing calculator.
