Bankers starting to tempt clients with RON-denominated mortgage loans with single-digit interest rates
Bankers have started an aggressive promotion of RON-denominated
mortgage loans, and are even coming up with single-digit APR in
order to attract clients.
UniCredit Tiriac Bank, one of the top-ten banks, has launched a
RON-denominated loan for the acquisition of homes with a margin
3.25% above the three-month ROBOR reference rate, currently at
5.56% a year. Therefore, for a 30-year loan, the maximum lending
period, the APR amounts to 9.75%.
The monthly amount that a client pays for a 120,000-RON (around
30,000-euro) loan spread over 30 years amounts to 973 RON. Bank
officials say the new offer seeks to diminish the exchange rate
risk associated with long-term foreign currency-denominated loans
and that loans denominated in the Romanian currency will be
increasingly promoted, as interest rates on RON-denominated loans
decline on the market.
UniCredit's offer, however, is not the cheapest on the market. BRD,
the second-largest bank on the Romanian market in terms of assets,
is selling RON-denominated mortgage loans with a 7.43% nominal
interest rate a year. For instance, the monthly instalment on a
120,000-RON 30-year loan is 953 RON, and the annual percentage rate
is 9.1%. The APR includes the commission for analysing the
application documentation - 1% of the value of the loan, and the
monthly management fee - 0.1% of the outstanding loan.