Robor decline might stimulate demand for "First Home" loans in lei

The decline in interests on lei on the interbank market and the increase in euro loan costs might stimulate clients to apply for state-secured mortgage loans in lei, after almost all the loans sold in the previous stages of the “First Home” scheme were euro denominated.

The three-month Robor (to which the cost of the lei loans is tied) went down to 5.8% a year, so that applying the maximum allowed margin of 2.5% the interest stands at 8.3% a year. The cost is therefore only three percent higher than a euro loan, which would also entail taking on foreign exchange risk. The Euribor indicator has already gone up to 1.35% a year, and banks can add up to four-percent margin, hence a 5.35% interest per annum.

Sales of state-secured mortgage loans have been mostly in foreign currency, with loans in lei amounting to less than 1%. The two largest local banks by assets, BCR and BRD, which have granted almost 900 million euros in “First Home” loans, are not even offering the option of a loan in lei to their clients.