How does a construction mortgage differ from a mortgage on a finished house?
When you buy a finished house, the bank lends against something that already exists. It can be valued and pledged, and the money goes to the seller in one payment. When you build, at the start there is only a plot and a design. The bank therefore lends against value that does not exist yet, and pays it out in parts as the building grows.
Tatra banka's pre-contract information on housing loans (November 2026 version) states that a building plot can serve as collateral, and that during construction the building under construction can secure the loan. The first part of the mortgage is released against the value of the plot. Every further part must match the proven increase in the property's value.
That leads to three differences you will notice in your account:
- Money arrives only for finished work. The start of every stage has to be pre-financed from somewhere.
- While you draw, you pay interest only on the amount drawn. Annuity instalments start after the loan is fully drawn, as both Tatra banka and Slovenská sporiteľňa describe it. Act No. 90/2016 on housing loans also makes an exception to its gradual-repayment rule for a deferral of repayment that is meant for building a home: it may not run longer than 18 months from the first drawdown (§ 8(34)(e)).
- The bank wants to see what you are building. Among the documents on the purpose of the loan, Tatra banka lists, for example, the building permit or an itemised budget.
Mortgage, building savings, ŠFRB or your own money?
Most houses are financed from a mix of sources. The table compares them by what the acts and the banks' terms say. We leave interest rates out on purpose: they differ between banks and change faster than the house goes up.
| Source | Who it suits | Collateral | How it is drawn | Limits |
|---|---|---|---|---|
| Mortgage | Anyone with income to repay who needs most of the sum | A pledge on property, for a new build also on the plot and the unfinished building | In one payment or in stages as the building gains value | LTV, DTI and DSTI set by the NBS |
| Building-savings loan | Anyone who saves in advance, also for smaller costs such as the design or utility connections | Under separate regulations, with the details set by the building-savings bank | A building loan once the saving conditions are met, until then possibly a loan on commercial terms | Only for the building purposes listed in § 11 of the act |
| ŠFRB loan | Young married couples, parents of small children and other groups under an income cap | A pledge on property insured against natural disasters, or a bank guarantee | By bank transfer from an account the fund opens, under the drawdown terms in the contract | A dwelling in a family house up to 120 m², up to 100 % of costs and at most 200,000 EUR per dwelling, term up to 40 years |
| Own funds | Everyone, at least for the start of construction | None | Any time, including before the first loan drawdown | They cover the gap between the collateral value and the loan |
Who can get an ŠFRB loan for a family house?
The State Housing Development Fund (ŠFRB) is governed by Act No. 150/2013, in the version in force from 1 January to 31 December 2026. An applicant can be a natural person who is a citizen of the EU, the EEA or Switzerland, has permanent residence in Slovakia, is at least 18 and has an income (§ 7). For acquiring a dwelling, which includes building a family house, § 10(4) narrows the group to:
- married couples where neither spouse is older than 35 on the day of the application,
- married couples or parents with a child aged six or under,
- households that include a person with a severe disability,
- people leaving institutional or foster care, up to the age of 35,
- a single parent with a child aged 15 or under.
The monthly income of the applicant and the people assessed with them must not exceed five times the subsistence minimum (§ 10(5)). The floor area of the residential and other rooms in a family house must not exceed 120 m², and more than half of it must be for living (§ 10(1)). The support is a loan with a term of at most 40 years, covering at most 100 % of the acquisition costs and at most 200,000 EUR per dwelling (§ 8(1)(a)).
For the architect, the area limit is part of the brief. A house meant for ŠFRB has to be designed within 120 m² from the first sketch, not cut down later. Check the current call and forms on the fund's website (sfrb.gov.sk). The fund can also turn an application down because the money for that year has run out (§ 15(22)).
What can building savings be used for?
Building savings are a banking product under Act No. 310/1992. You save for building purposes and can become entitled to a state premium and a building loan (§ 2). Only a building-savings bank may offer them. The list of building purposes in § 11(1) is broad for anyone building a house. It covers building a family house, buying a building plot and preparing the plot, including utility connections. It also covers preparing the design documentation and obtaining the energy performance certificate.
Building savings can therefore cover costs that come before a mortgage starts to pay out: the design, the connections, the site works. If you are not yet entitled to a building loan, § 12(2)(a) lets the building-savings bank lend on commercial terms to savers who are still saving.
How does the bank release money in stages?
Staged drawdown ties each payout to progress on site. Slovenská sporiteľňa's page on staged financing (dated 17 July 2026) describes five tranches and asks for photographs after each stage. Tatra banka leaves the size of each drawdown to you, but each must match the proven increase in value. It charges for the second and every later tranche under its price list. The table shows how to align Slovenská sporiteľňa's five tranches with your payments to the contractor.
| Tranche | What must be finished | What to agree with the contractor |
|---|---|---|
| 1 | Foundations, ground-floor walls, the unfinished building entered in the cadastre | First payment only for finished foundations and walls, not a large advance |
| 2 | Closed shell: external walls, windows, entrance door, roof | Payment after you take over the closed shell |
| 3 | Rough-in services, internal plaster, screeds | Payment for services and wet trades |
| 4 | Facade, tiling, floors, sanitary ware, doors, boiler, hot-water pipes | Payment for finishing works |
| 5 | Kitchen and built-in furniture | Payment to the interior suppliers |
The payment schedule in the contract for work should follow the bank's milestones, not the other way round. If the contractor wants money for a stage before the bank accepts it, you pay the difference yourself. Tatra banka also warns that if you fall behind on payments during staged drawdown, the bank may refuse further drawdowns.
What is a property valuation and when is it done?
A property valuation sets the collateral value that the loan amount depends on. Act No. 90/2016, § 9, requires the lender to set a limit for the collateral ratio, that is, the loan divided by the value of the pledged property. The lender must also have that value assessed prudently by a valuer under a separate regulation. The footnote gives the act on court experts as an example.
The valuation is done before the loan is approved: Tatra banka lists an expert valuation report among the application documents, and the bank sets the property value bound by the expert's valuation. For a new build, though, it is not one number. At the start there is the value of the plot, and every later tranche must match the proven increase in value. The valuer therefore needs the design and an itemised budget. Without them there is nothing to estimate what will stand on the plot.
What limits does the NBS set: LTV, DTI and DSTI?
Národná banka Slovenska sets three limits for housing loans. The values in the table come from the NBS pages on financial stability instruments, as they apply in November 2026.
| Ratio | What it measures | NBS limit |
|---|---|---|
| LTV | The loan, plus other loans secured on the same property, against the collateral value | 80 %, and up to 20 % of new loans may reach 90 % |
| DTI | Total debt against annual income | Eight times annual household income. For loans still being repaid after age 65, the limit falls with age |
| DSTI | Repayments on all loans against income after the subsistence minimum | 60 %. The repayment is usually tested with an interest-rate buffer above the offered rate |
Under the NBS rules, the collateral value for LTV is the lowest of three figures: the purchase price, the external valuer's figure and the bank's internal valuation. For a new build, what counts is not how much you have put into the house but how much the valuation accepts.
From 1 January 2027 the NBS is phasing in new LTV limits. The limit rises to 90 % for borrowers aged up to 35 when none of them owns a residential property and the loan is partly for buying or building. An unfinished building whose construction the loan finances does not count as an owned property. From 1 July 2027 it drops to 70 % for borrowers who own two or more residential properties (§ 9d of NBS measure 10/2016). Everyone else stays at 80 %. Until the end of 2026 the current rules apply.
How does the energy class relate to a green mortgage?
Some banks tie better terms to the energy class of the house. ČSOB, for example, for its limited offer of financing a home for your own living up to 90 % of the purchase price or of the value set by the bank's valuer, requires an energy performance certificate of class A0, A1, A or B (mortgage page as of 13 November 2026). These are product terms, not law. Each bank sets them differently and changes them.
For a new building, the owner must have the certificate by the day the application for the occupancy approval is filed, unless the building authority decides otherwise (§ 8(1)(a) of Act No. 555/2005). During design, a design energy assessment is prepared (§ 4a(2)), which predicts the class from the design documentation. Ask the bank in advance how you prove the class during construction and what happens if the house misses the target class.
How do the budget and bill of quantities help with the bank?
The bank and the valuer both need to know what the building will cost and in what order it will be paid for. A construction budget priced from the bill of quantities gives items that can be assigned to tranches. A rough figure per square metre cannot do that.
- Split the budget by the bank's tranches. You will see how much each drawdown covers and how much you must add from your own funds.
- Copy the same milestones into the payment schedule of the contract with the builder.
- Plan items that come up only in later tranches, such as the kitchen in the last one, both in time and in the budget.
- Keep the reserve outside the loan. Increasing the loan in the middle of construction cannot be taken for granted.
How to size the reserve from the open risks is covered in the article why construction goes over budget. The cost of the design that contains these documents is covered in the article how much an architect costs.