Bankers were also able to charge analysis and administration fees before, but the end cost of the loan was supposed to keep within the 2.5% margin above three-month Robor. Now, in addition to the nominal interest rate, of 7% per year at the current level of three-month Robor, clients could be required to also pay fees equivalent to one percentage point of the interest rate.
So the monthly installment on an average-value loan (160,000 lei) could increase by RON80 or around 8% if, to the maximum cost currently allowed by law, one adds a RON500 analysis fee and a 0.05% monthly administration fee charged on the loan volume.
The monthly installment on a RON160,000 loan granted over 30 years would rise from RON1,065 to RON1,145, while the total cost of the loan would climb by around RON30,000 to RON402,000. Basically, the client pays back over 2.5 times more than they borrowed.
Market specialists say bankers will probably not make mortgage loans much more expensive,” says Liviu Andrei, executive manager of broker Alliance Finance, who says there are currently cheaper standard mortgage loans on the market and that clients could turn to them even if they would have to make a more significant downpayment.
Some banks could, however, introduce new fees for “First home” loans as they have complained in the past that the margin on state-guaranteed mortgage loans does not ensure their profitability.
(English version by Daniela Stoican)