OTP Bank increases its loan down payment for mortgage loans to 20 pct

Newsroom 18/07/2016 | 16:58

OTP Bank has decided to increase the down payments on mortgage loans two months after the debt discharge bill was signed into law by president Klaus Iohannis. The lender will ask for 20 percent down payment instead of 15 percent.

Many banks decided already to tighten the loan conditions because of the debt discharge law, increasing the overall down payment for house loans to almost 30-40 percent.

As a result of the legislation changes from the last year, the banks from Romania have recently changed their policy regarding the necessary down payment for accessing the mortgage loans. The Prima Casa program has succeeded to influence the local market of mortgage loans because of the uncertainty, according to News.ro.

However, analyzing the economy’s evolution and of houses market, the OTP Bank Romania representatives believe that on medium and long term, the mortgage loans market will have a positive evolution.

„The Romania’s economy will be on a new expansionary cycle, registering a strong growth of GDP, while its external vulnerability reduced considerably from the financial crisis from 2008. At the same time, the average salaries show increasing tendencies, which, together with the previous adjustments of real estate prices, succeed in making the acquisition of new properties more accessible for individuals, ” says Laszlo Diosi, the general director of OTP Bank Romania.

Moreover, the data at EU level regarding the living conditions show the necessity of new houses in Romania. Therefore „from our point of view, these factors might ensure a solid base for a sustainable development of mortgage loans market, ” adds Diosi.

The volume of mortgage loans given by OTP in 2016 grew by 70 percent compared with the same period of 2015.

Georgiana Bendre

 

 

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