Sursa foto: Inquam Photos / Octav Ganea
The National Bank of Romania (NBR) wants to tighten lending conditions by increasing the down payment on a number of mortgage loans, according to a draft regulation published on Wednesday.
Specifically, those who take out mortgages to buy property they will not use as their own home will pay a 10% higher down payment than at present.
“In the case of loans granted for the purchase of a property which is not intended to be used as a dwelling for the borrower’s own permanent/continuous use, the limits laid down in para. (1)-(3) are reduced by 10 percentage points,” according to the NBR document.
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Thus, the value of a loan for real estate investment may not exceed 75% of the value of the mortgage collateral in the case of loans granted in lei, compared to 85% in the past, 65% for loans in euro, and 50% for loans in other currencies.
The new rules therefore show that the down payment will increase to 25% for mortgage loans for real estate investments in lei, 35% for those in euro, and 50% for those in other currencies.
The new rules come at a time when the National Bank has raised the key interest rate for the first time and is expected to raise it at least once more this year. The move was taken to counter galloping inflation. So market interest rates are also expected to rise, which would increase the burden on borrowers.
In the same draft, the NBR also states that banks shall determine the maximum permissible leverage levels for granting loans through their own lending rules, taking into account the currency risk, the interest rate risk and the risk of a reduction in eligible disposable income over the life of the loan.
The new rules come into force from 1 January 2022.
Edited for English