The stock of mortgage loans in Romanian currency lei (RON) increased by RON 930 million (EUR 204.1 million) in Romania in May.

It has been the biggest monthly increase registered this year.

For comparison, the monthly average of the new funds added from January to April amounted to about RON 600 million (EUR 131.6 million). After the accelerated growth in May, the total stock of mortgage loans in lei reached RON 32.1 billion (EUR 7 billion).

Last month's advance is mainly the effect of the First House (Prima Casa) lending program in 2017. The first installment of RON 2 billion (EUR 440 million) in guarantees was granted in the beginning of March. However, guarantees were quickly exhausted, and the Finance Ministry has allotted a second installment of RON 500 million (EUR 110 million) at the beginning of this month.

The First House loans, backed by these state guarantees, account for about two-thirds of all new mortgage loans granted by local banks. In total, the First House loans and the standard mortgage loans granted by banks exceeded RON 3.3 billion (EUR 724 million) in the first five months of this year.

In the last ten years, the total mortgage loan stock has increased 5.5 times. It currently accounts for more than half of the total household loans, according to Romania’s National Bank (BNR).

editor@romania-insider.com