Standard mortgage loans turned into the main instrument to finance the purchase of a dwelling, as they accounted for 70% of the total new funding granted between March 2018 and March 2019, according to the National Bank of Romania (BNR), local Ziarul Financiar reported.
For comparison, seven years ago, standard mortgages accounted for less than 30% of all new mortgage funding.
The rise in the standard mortgage lending took place at the expense of First Home loans, which have lost their attractiveness in front of the fixed interest rate standard mortgage loans (while the First Home loans have their interest rate indexed to the money market rates). The main advantage of the First Home loans remains the down payment of only 5%, compared to 15% in the case of standard mortgage loans.
The central bank experts point to customers’ appetite for fixed interest rates as a key driver behind the advance of standard mortgage loans. Between March 2018 and March 2019, banks granted new mortgages worth RON 12.1 billion (EUR 2.6 bln).
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