Those that have ongoing loans with floating interest rates, but which are not tied to a clear indicator, now have before them additional documents in which bankers propose significant margins, 7-9 percentage points above Robor and Euribor, but this leaves them exposed to the risk of increased monthly instalments.
In the case of these loans, ordinance 50 itself asks banks to
move to tying the loans to an independent indicator, plus a margin.
Since bankers are not currently willing to diminish the cost of
loans, clients are in a position to accept high margins. A
prospective increase in the reference indicator – very likely in
Euribor’s case, since it is currently close to all-time lows of
under 1% a year, compared with an average previous levels 3%-4% a
year – will mean the payment of higher instalments in the
future.
“Euribor is currently very low, interest rates are attractive, but
sooner or later they will rise. At present, the only measure banks
can take is the one they are proposing, to add such margins to the
Euribor. In the future, if internal interest rates fall and Euribor
rises, banks may renegotiate some of the contracts, on a case by
case basis,” says Aurelian Dochia, financial analyst and former
investment banker with BRD-SocGen group.