Sales through this scheme stood at about 25,000 loans cumulating RON4 billion last year, according to the National Loan Guarantee Fund for Small and Medium-Sized Enterprises (FNGCIMM), the institution that manages the governmental guarantees for this program. A total of about 130,000 loans have been granted via the First Home scheme in the last five and a half years.
“Demand was down last year compared with previous years because First Home and standard home purchases evened out in the system,” said Anca Bidian, chief executive officer of loan broker Kiwi Finance.
”Interests on standard purchases are now comparable to First Home costs. Customers do not have to cope with the restrictions those applying for a First Home purchase have to deal with.”
Many customers chose to go for standard mortgage loans as interests fell, she added.
A standard leu-denominated mortgage loan interest starts from about 5% per annum. The First Home interest is about 4% (three-month ROBOR plus a 2.5% margin). On top of that comes a management fee that goes to the Loan Guarantee Fund. First Home loans have been available only in lei since August 2013.
“I think there will still be customers with First Home loan appetite but not as many as there used to be in the past years. Standard loan interests are going down and most of our customers, at least, assessed the offers and chose standard loans,” Bidian added.
The number of contracts signed in 2009-2014 stood at about 130,000, with loans amounting to EUR5 billion equivalent.
The average loan stood at a EUR36,000 last year, the same as in 2013, while in the first year of the scheme, 2009, it stood at more than EUR40,000. The government upped the guarantee cap by about RON400 million last fall because of demand.
Banks sold about 2,100 loans per month in 2014, with the monthly average value reaching RON330 million (EUR74 million). Last year was the second best for the government-backed scheme. The best year was 2012, when banks sold 2,250 loans per month, with the monthly average reaching EUR84 million equivalent. (EUR1=RON4.4853)
(English version by Loredana Fratila-Cristescu)