Mortgage market is the meeting place of supply and demand for long-term financing means. There have been developed various techniques of financing long-term loans through the capital market, thus there exist the „american“ model of securitization of mortgage loans and the „european“ model of the balance sheet securitization of mortgage loans. The main difference between these two models is that the issuance of covered bonds with receivables and the risk associated with them are not sold, but remain on the balance sheet of the creditor. While the securitization of sub-prime loans are thought to be the cause of the financial crisis, balance sheet securitization and issuance of covered bonds in the crisis were proved to be cost effective and socially responsible because they have not contributed to the crisis. Given that Croatia is extremely bank-based country, it seems that the securitization of mortgage loans or the issuance of covered bonds are one of the possible solutions to the problem of long-term financing in Croatia.