Selling a property with a mortgage in Bansko: How to make a profit while still owing money?

This mindset keeps you in a financial trap. The truth is that you are the full owner of the property, and the bank only has collateral (encumbrance) on it. In the dynamic market of 2026, when prices in Bansko jumped significantly, the sale of a property with a mortgage is one of the most common and routine transactions. This is the moment when many investors "cash in" the difference between the increased property value and the remaining loan balance.

In this detailed guide, we will break down the process step by step: How to sell a property that you still owe the bank, and how to ensure the security of both parties (seller and buyer).

STEP 1: The Mathematics of Profit (Calculation)

Before you place an ad and talk to brokers, you need to know what will actually go into your pocket after the deal. The calculation formula is simple, but you need to be precise:

Practical example: You bought a studio for 30,000 euros 5 years ago with a loan. Now it costs 55,000 euros. You still owe 20,000 euros to the bank. When you sell, you automatically pay off the debt and collect the difference from 35,000 euros net (minus fees). You don't need to have that 20,000 euros upfront!

STEP 2: Certificate of current debt

When you find a serious buyer and sign a preliminary contract (or are about to make a deal), your first task is to go to your bank and apply for a document called „"Certificate of residual debt and bank account for repayment"“.

This document is the "holy scripture" for the transaction and without it the notary will not acknowledge it. In it, the bank officially states:

• The exact amount (to the nearest penny) that must be transferred to clear the credit as of the transaction date.
• A special IBAN account of the bank to which the repayment money should be received.
• Letter of engagement: The bank declares that upon receipt of the said amount, it will give its irrevocable consent to cancel the mortgage on the property.

STEP 3: Payment Scenarios (How does money change hands?)

Here's the tricky part of the deal. How exactly does the buyer pay the bank and you so that everyone is protected?

Scenario A: Buyer pays in cash (with own funds)

This is the easiest and fastest option for all countries.

1. On the day of the transaction, in front of the notary, the buyer makes two bank transfers.
2. Translation 1: Directly to the creditor bank (the amount stated in the Certificate of Debt).
3. Translation 2: The remainder of the sale price (your profit) is transferred directly to your personal account.
4. The notary describes both transfers in detail in the notarial deed, ensuring that the money went to its intended purpose.

Scenario B: The buyer also uses a mortgage loan (Bank repays Bank)

This is the most common scenario in 2026, as few people buy with cash only.

1. The buyer's bank (Bank B) enters into direct communication with your bank (Bank A).
2. A tripartite agreement is signed or letters of commitment are exchanged between the banks.
3. After the transaction is confirmed and the new mortgage (second in line) is registered, Bank B transfers money to Bank A to close your loan.
4. Only after Bank A confirms the repayment and lifts its mortgage does Bank B become the first-in-line lender.
5. The price difference is passed on to you.

STEP 4: Buyer Protection (Why not be afraid?)

If you are reading this as a potential buyer of a mortgaged property, you may be worried: „"What if I pay the seller's debt and the mortgage remains or he disappears?"“.

The risk is minimal if used Escrow account at the notary or a special account. The money is held by the notary and is released to the seller and the bank only when all the documents are in order and the transaction is registered. In addition, the bank's "Letter of Commitment" is a legally binding document - the bank is legally obliged to remove the mortgage once it receives the money, and cannot refuse.

Why is now the time to sell?

The market in Bansko in 2026 is on a serious rise, driven by digital nomads and the full year's interest. If you bought a property before 2022, its value has probably increased by at least 30-40%. Even if you have active credit, selling now allows you to:

• Clear your debt completely and stop paying interest.
• You realize free cash from the appreciation (Capital Gain).
• Reinvest the funds in a larger property, another business, or simply keep them.

Conclusion

Selling a property with a mortgage is an absolutely routine procedure for notaries, brokers and banks in Bulgaria. It is not an obstacle, but simply an additional administrative step in the process. Don't let the loan make you a hostage to a property that you no longer need or that you want to replace with a better one.