Croatian state to subsidize mortgage rates

The Croatian state has decided to subsidize a part of the mortgage loan interest rates for first time buyers in order to perk up the slumping real estate market.The state will subsidize 66 per cent of the interest rate for the first four years for credits that do not exceed 100,000 Euros (in kunas).The loan rates would not exceed five per cent and with the state's subsidies this would mean that clients could be paying as little as 1.7 per cent of interest at the start. The state plans to approach banks with a public tender and choose the institution that offers the most reasonable rate, the daily Vecernji List writes.The state subsidies would have to be paid back within 60 months of paying off the rest of the loan.The loan duration can not exceed 25 years and to qualify, clients will have to be first-time buyers of newly-built property.

Source: Croatian Times Online News