Raiffeisen replies: 20 years, 22% interest

Several weeks ago, one of the leading banks in the system announced it would start granting 25-year loans for those wanting to buy a home. It was the first attempt to relax the loan-granting conditions on a market expected to register one of the fastest growth paces. From that moment on, everyone has been closely watching the moves that have been or will be made by the banks granting or about to grant such loans. Furthermore, everybody was eagerly waiting for the offer of Raiffeisen Bank – primarily a retail bank, which had announced early in the year that its 2003 strategy included entering the housing loan market. And the offer has finally become available.
As of yesterday, Raiffeisen Bank offers housing loans for individual consumers. The loans will mature in 3 to 20 years and the interest will range from 22% for ROL to 8.5% for euros. This is the lowest interest for ROL loans on the entire market, at least for now.
“We have entered this market as we promised, after all, because on the one hand we believed in its future and second, because we (i.e. the bank) have had more and more people coming and inquiring about such credits lately. Our initial plans: the interest policy applied clearly shows we stimulate lending in ROL because whoever comes and gets such a loan is free of the foreign currency risk,” Rasvan Radu, Raiffeisen Bank vice-president told Ziarul Financiar.
The loans will be worth 5,000 to 200,000 euros or the ROL or dollar equivalent, with the minimal required down payment reaching 15% for ROL-denominated credits and 25% for euro or dollar-denominated ones. The loan is collateralised by a mortgage on the property purchased, with no guarantors required. Those applying for such a loan will have to conclude two insurance policies – a life insurance policy for the applicant and a property insurance policy for the home, both of them made out to the bank for the entire duration of the loan.
The bank will suggest its clients to conclude the insurance contracts with AIG Life and with UNITA (property).  And if the client wants to work with a different insurer, the Raiffeisen officials say they have no problem with that.