“Around 20% of clients are interested in leu-denominated loans at first. But they change their mind when they see the cost difference. The interest is almost double for a leu-denominated loan than for a euro-denominated one. There is still room for interests on loans in lei to be cut,” says Liviu Andrei, executive manager of credit broker Alliance Finance.
Banks involved in the “First Home” scheme can levy a maximum interest rate made up of three-month Euribor plus a fixed margin of 4% at the most and three-month Robor plus a margin of a maximum of 2.5% for leu-denominated loans, with the margin also including prospective fees. At the current level of interbank market indicators, the difference between the interest on a euro-denominated loan and the interest on a leu-denominated one is of around 2.5 percentage points.
For instance, in the case of a EUR57,000 foreign-currency loan taken out over 30 years, the client pays around EUR120,000 in overall amount, while for a leu-denominated loan worth RON240,000 (the equivalent of EUR57,000) the amount paid at the end of the contract is RON608,000 (the equivalent of EUR245,000).
In fact, not all banks involved in the First Home scheme have leu-denominated loans in their product range. It is even the case of BCR and BRD, the largest banks in the system, which had the largest guarantee caps in previous editions of the scheme. For instance, in the first edition of the scheme, state-run bank CEC Bank offered leu-denominated loans, but in 2010 it started to sell euro loans as well, because of very low demand for loans in lei.
The eight banks that resumed sales of state-guaranteed mortgage loans had granted 1,960 loans by the end of last week, with state guarantees amounting to EUR38.6 million, according to data supplied to ZF by the National Guarantee Fund for Small and Medium-Sized Enterprises (FNGCIMM), the institution that manages the guarantees within the scheme.
This means loans granted by banks amount to over EUR77 million, considering that the state only guarantees half the loans. The average value of a loan was EUR39,700, a similar level to that recorded in previous editions.
(English version by Daniela Stoican, Editing by Loredana Fratila-Cristescu)