Romanians' only chance to get 4% interest on loans per year

Romanians could get unexpectedly low interests for loans granted in the past under the current market circumstances, following the enforcement of the Emergency Ordinance of June, which set new conditions for the loans granted to individuals.

At stake are the variable rate loans tied to non-transparent indicators – the so-called “internal reference rate”, in which case interest rates on an euro-denominated mortgage loan could go down from 8 to 10% towards 4% a year, which is comparable to the level on Western European markets.

Subject to interpretation, certain provisions of the Ordinance might force banks to offer their clients the margins set in the loan contracts signed in the past but applied to the independent indicators like Euribor or Robor now, instead of the bank’s own reference indicators detailed in the initial document, which would lead to lower interests and much lower revenues for bankers. A number of clients have already seized the opportunity and asked banks for lower rates, and even went to court to get them. Lower loan instalments would leave people with more money to spend on other purchases, thus stimulating consumption.