Bankers have started an aggressive promotion of RON-denominatedmortgage loans, and are even coming up with single-digit APR inorder to attract clients.
UniCredit Tiriac Bank, one of the top-ten banks, has launched aRON-denominated loan for the acquisition of homes with a margin3.25% above the three-month ROBOR reference rate, currently at5.56% a year. Therefore, for a 30-year loan, the maximum lendingperiod, the APR amounts to 9.75%.
The monthly amount that a client pays for a 120,000-RON (around30,000-euro) loan spread over 30 years amounts to 973 RON. Bankofficials say the new offer seeks to diminish the exchange raterisk associated with long-term foreign currency-denominated loansand that loans denominated in the Romanian currency will beincreasingly promoted, as interest rates on RON-denominated loansdecline 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% nominalinterest rate a year. For instance, the monthly instalment on a120,000-RON 30-year loan is 953 RON, and the annual percentage rateis 9.1%. The APR includes the commission for analysing theapplication documentation - 1% of the value of the loan, and themonthly management fee - 0.1% of the outstanding loan.
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