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.
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
