A new bathroom, new windows, insulation, a new heating system or a full renovation of a flat you have just bought — the sums quickly outgrow your savings. Banks offer three main ways to finance it, and the differences go well beyond the interest rate.
| Consumer loan | Mortgage | Green loan | |
|---|---|---|---|
| Collateral | usually none | mortgage on a property | depends on product |
| Amount | smaller | larger | per the measures |
| Term | shorter | long | varies |
| Rate | higher | lower | often preferential |
| One-off costs | small | valuation, notary, registration | per product |
| Speed | days | weeks | per the checks |
The fastest and simplest option — no mortgage, no valuation, no notary. The bank looks mainly at your income and credit history. It is governed by Bulgaria's Consumer Credit Act (ZPK), which caps the price: the APR may not exceed five times the statutory interest rate.
Suits you when: the renovation is modest, you want to repay it within a few years, and you would rather not encumber the property.
Watch out for: the higher rate, arrangement fees and bundled products. Compare offers on APR, not the headline rate. Keep the instalment within budget too: if you later apply for a mortgage, the bank will count this instalment when it assesses your debt burden.
For a large project — a full renovation of an old flat or a house — a mortgage usually costs less per month, because the rate is lower and the term longer. The price is the one-off costs: a valuation, the notary fee, the fee for registering the mortgage, and later the fee for cancelling it.
The BNB lending standards for housing loans secured by residential property, in force since 1 October 2024, also apply: loan-to-value up to 85%, debt payments up to 50% of monthly income, and a term up to 30 years. Banks have only limited room for exceptions.
If you are still buying, ask whether the bank can finance the purchase and the renovation in a single loan. Some banks offer this, especially for homes sold at the bare-plaster stage. What the fit-out costs is covered in our guide to buying a shell apartment.
If you already have a mortgage, some banks offer an additional loan under the same collateral. That saves part of the costs, but the terms are negotiated separately.
"Green" loans finance energy-efficiency measures — insulation, energy-saving windows, heat pumps, solar water heaters, photovoltaics. Banks offer them as separate products, sometimes under programmes with international financial institutions, usually at a lower rate or with lower fees.
They typically require:
If you are considering rooftop solar, first see what it involves. State and EU programmes for retrofitting and energy efficiency change over time — check the current terms with the relevant institution before you plan your budget.
Besides the usual ID and income documents:
Do the sums on total cost — interest plus fees over the full term — not just the monthly instalment. You can compare scenarios with our mortgage calculator.
A consumer loan is fast but expensive. A mortgage is cheaper per month but carries one-off costs and more paperwork. A green loan pays off when the works include energy-efficiency measures you can document. The right choice depends on the amount, the term and whether the home is already mortgaged.
If you would like to compare the options with us and prepare the documents for the bank, call us or come into the office.
This is general information, not financial advice. Bank and programme terms change — check current offers. Verified as of October 2026.
