How much the bank actually makes on your mortgage: the 30-year math

When a bank approves your mortgage for EUR 200,000, it's not giving you that money. It's selling it to you — in installments, with a markup. That markup is the interest. And if you've never seen the final total, it might surprise you: over a 30-year loan, you'll pay back roughly EUR 283,000. The EUR 83,000 difference is what the bank makes from you.

Let's break it down — using real 2026 Bulgarian market rates.

How the bank earns — amortization logic

Mortgages in Bulgaria (and worldwide) use annuity payments — you pay the same amount every month. But inside that payment, the split changes over time:

• In the early years, most of the payment goes toward interest, with only a small portion reducing the principal.
• In the later years, nearly the entire payment goes toward principal, while the interest shrinks to almost nothing.

Why? Because interest is calculated on the remaining balance. At the start, you owe EUR 200,000 — the interest is large. After 20 years, you owe EUR 60,000 — the interest is small.

Concretely: on a EUR 200,000 loan at 2.47%, your monthly payment is EUR 787. Of that first payment, EUR 412 goes to interest and only EUR 375 actually reduces your debt. At this rate, the crossover happens around year 2 — from then on, more than half of each payment goes toward principal.

The bill for EUR 200,000 at different rates

The average interest rate on new housing loans in Bulgaria as of February 2026 is 2.47% (BNB data). But rates can change — here's what each level means for your final bill:

The difference between 2.47% and 3.47% is "just" 1 percentage point. But in euros, that difference is EUR 38,743 more interest and EUR 108 higher monthly payments. Over 30 years, 1% turns into the price of a new car.

See the 30-year breakdown for EUR 200,000 at 2.47% — the calculator shows the full month-by-month split.

30 years or 20 — what a shorter term saves you

A shorter term means a higher payment, but dramatically less interest:

With a 20-year term, you pay EUR 270 more per month but save nearly EUR 30,000 in interest. Plus you're mortgage-free 10 years earlier.

The trade-off is real: EUR 270 extra per month is not trivial. But if you can handle it, the math speaks for itself.

What one extra payment per year changes

Can't commit to a shorter term but still want to save? There's a simple trick: make 13 payments a year instead of 12. Once a year (from a bonus, 13th salary, or tax refund), put one extra payment toward your principal.

The result on a EUR 200,000 loan at 2.47% over 30 years:

• You pay off the loan in 26 years and 10 months instead of 30 years
• You save EUR 9,446 in interest
• You're free 3 years and 2 months earlier

Important: under Bulgarian law (ЗКНИП, Art. 41), the bank may charge an early repayment fee (up to 1% of the amount repaid) only during the first 12 months of the loan. After the first year, they have no right to charge you anything for extra payments.

Is the bank your enemy?

No. The bank provides a service — it gives you EUR 200,000 today so you can live in your own home instead of waiting 20 years to save up. Interest is the price of that service.

But it's important to know what the real price is — because it's not EUR 787 per month. It's EUR 83,365 over 30 years. When you see it as a total, your decisions become clearer:

• Is it worth paying EUR 270 more per month for a 20-year term?
• Is it worth making a larger down payment to borrow less?
• Is it worth negotiating the rate down by 0.3%?

Every one of these questions has a concrete answer in euros.

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