1.5 billion lei is the maximum guaranteed amount in 2021 for the “Noua Casa” first-time homebuyer program (the successor of the popular “Prima Casa” or the first house program), an amount that could cover 18,000 beneficiaries. The amount is divided between 14 banks partnering in the program, which all have launched their offers on the market. We looked through the offers of the participating banks and present you with some credit simulations.
The maximum amount of the loan that can be accessed through the Noua Casa program for 2021 is 66,500 euros. For new houses with prices lower than 70,000 euros, the minimum downpayment is 5% and 15% for homes whose price is between 70,000 and 140,000 euros. The interest rate is variable, calculated according to the Consumer Credit Reference Index (IRCC), plus a fixed margin of up to 2%. The Noua Casa loans provide for a lower downpayment than the standard housing loans and are guaranteed by the state, in a proportion of 60% of the amount borrowed for loans between 70 000 euros and 140 000 euros, respectively 50% of the borrowed amount for loans of up to EUR 70 000.
The 14 banks participating in the program are: BRD-GSG, BCR, Banca Transilvania, CEC Bank, ING Bank, Raiffeisen Bank, OTP Bank, Banca Românească, Unicredit Bank, Garanti Bank, First Bank, Vista Bank, Intesa Sanpaolo Bank and Alpha Bank.
BCR takes the biggest slice of the market
From the total guarantee amount of 1.5 billion lei granted by the National Credit Guarantee Fund for SMEs (FNGCIMM) for the 14 banks entered in the “Noua Casa” program, 487 million lei went to BCR. The funds allocated to BCR represent 32.5% of the total guarantees provided by the Romanian Government for this program. BCR announced in early April that it accepts applications for the Noa a Casa program and offers this type of loan with an interest rate of 2% + IRCC (1.88%) and no fee for application analysis. The minimum downpayment is 5% for homes up to 70,000 euros (the equivalent in lei), and 15% for homes with values between 70,001 and 140,000 euros, equivalent to lei. The maximum amount of the loan that can be accessed can reach 119,000 euros, and the maximum grant loan term is 30 years.
An example of the BCR Noua Casa loan calculation. For a loan of 230,000 lei, for a period of 30 years, at a 3.88% (2% + IRCC) interest rate; the IRCC rate is 1.88%. There is also a 0.33% per annum for the part of the loan that amount that is guaranteed by the state (FNGCIMM management fee) well as a property evaluation fee of 370 lei and. The monthly payment comes to 1,082 lei (the amount does not include the management fee due to FNGCIMM), and the total amount paid by the end of the loan will reach 395,945 lei. The simulation used a 4.11% effective annual interest rate.
BRD is preparing loans totaling 330 million lei
BRD Groupe Société Générale also resumed lending under the “Noua Casa” program. The bank has at its disposal from the FNGCIMM, a guaranteed amount that will allow it to issue state-backed loans totaling of approximately 330 million lei, the bank’s representatives specify. Under the Program, the bank grants loans with an interest rate of IRCC + 2pp, the maximum value of a loan being 66,500 euros (equivalent in lei) for financing a new or old house, with a maximum value of 70,000 euros, in which case the downpayment is 5%, respectively 119,000 euros (equivalent in lei) maximum loan amount for financing new buildings with a price higher than 70,000 euros, with a minimum downpayment of 15%. The maximum lending period is 360 months, the loans will finance completed real estate projects, new or old. In 2009, the bank granted the first loan under the Prima Casa program.
ING has received in excess of 1,200 applications
Romanians wishing to purchase a home through the “Noua Casa” program have the option to apply for credit at ING Bank Romania since March 2021. From the start of the program, ING has received over 1,200 applications, more than twice as many as the previous year, the bank’s representatives said. ING also loan simulator which also takes into account life insurance.
“Noua Casa” ING credit simulation. For a borrowed amount of 400,000 lei, for 30 years period, with a downpayment of 15% and 4.3% effective annual interest rate, the monthly payment reaches 1834 lei (without insurance included). The total amount to be reimbursed plus insurance will reach 705,867 lei.
CEC Bank, low-interest rates for certain customers
CEC Bank has been a partner of the program for the past 12 years and is in 4th place in the top of the granted guaranteed financing. The bank announces that it comes with an improved offer compared to the standard offer of the program: an interest reduced by 0.10 pp, compared to the standard one (2% p.a.), for those who receive their salary through CEC Bank account. Thus, the interest rate starts at 3.78% / year (IRCC + 1.90%) in the case of customers who receive their salary through the bank. In 2020, mortgages granted by CEC Bank increased by more than 30%, higher than the market growth of about 10%. Noua Casă loans represented about 25% of the total real estate and mortgage loans granted by the bank. Through the government’s New House program, new homes (less than 5 years old) worth up to 140,000 euros or old homes (more than 5 years old) worth up to 70,000 euros can be purchased.
An example of calculation for a CEC Bank “Noua Casa” mortgage. A couple with each partner earning the average annual salary (approximately 6,800 lei net/family/month), who have no other loans, can access a 25-year period loan of 510,000 lei (approx. 103,000 euros). The monthly payment will be 2,630 lei, assuming they chose to receive their salaries through CEC Bank, and using a 3.84% effective annual interest rate.
CEC Bank does not charge file analysis fees, and the state guarantee management fee owed to the Guarantee Fund has been reduced from 0.40% to 0.30% per year in 2021. The fee applies to the part of the loan that is the guarantee by the state (ie 50% and 60% of the credit balance, respectively).
Banca Transilvania guide for interest rates and fees
Banca Transilvania came up with a “guide” detailing information about interest and commissions:
- the interest rate consists of the bank’s fixed rate of 2 % + the IRCC valid at the time of signing
- property evaluation fee 450 lei for a property in an apparent building and 700 lei for a detached house, villa, land or other constructions
- a collateral deposit is required to guarantee the interest, which accumulates 3 interest payments
- monthly account management fee: 0 lei
- early repayment fee: 0 lei
- credit management fee: 0.30% per annum, for guarantees granted from 2021, owed to FNGCIMM, charged on the balance of the loan making up of the state guarantee
- in the case of promises of guarantee, a single analysis fee of 0.15% / year is applied to the amount of the guarantee promise.
- home insurance is mandatory and you can buy it against all risks
- 87.60 lei x 2 fees to (for the collateral deposit contract set up in order to guarantee the interest rate and for the movable mortgage contract on the credit balances of all accounts opened with the bank)
An example of calculation Noua Casa BT. For a loan amounting to 240,000 lei, contracted for a period of 30 years (360 monthly installments), with variable interest for the entire crediting period of 3.67%, composed of IRCC (1.67%) + fixed interest rate of 2.00%, you will pay a monthly payment of 1,100.61 lei. In this case, the APR (Annual Effective Interest rate) will be 3.94%, the total cost of the loan is 164,871.77 lei, and the total amount to be paid will be repaid is 404,871 lei.