Tightening of the credit market in our country. The Bulgarian National Bank is considering a cooling of housing lending, and the reason – commercial banks granted loans too easily, the latest analysis showed.
Over the past year, the withdrawn mortgage loans in our country have increased by over 20%. The average amount of a loan is BGN 200 thousand, and the requirements of the banks are that the monthly installment for repayment should not exceed 50% of the income. In addition, banks require a co-payment when granting the loan, which is on average between 15 and 20% of the total price of the home or the loan. Part of the changes envisage greater participation of the client and the condition that he disposes of this money himself.
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Two years ago, Tsveti Metodiev and his wife Hristiana started looking for a home. Shortly before they find the right apartment for them, they take out a loan from the bank to secure the necessary money.
“We received a promise from the bank, they offered us an amount that is greater than what we need. After we had the promise, we moved on to buying a property,” he says. Such a problem-free procedure may become a thing of the past if the BNB decides to “cool down the risk appetite of some borrowers”. In other words – to make it more difficult to withdraw credit.
“We are not only looking at the growth of mortgages, but how such a measure will affect the economy in general. This decision will be taken very carefully and on the basis of the incoming data”, stated the governor of the BNB, Dimitar Radev.
Datsov: If the BNB takes measures, interest rates on home loans will rise
The new measures may include a requirement that the monthly loan repayment installment not exceed 40% of the client’s income. Another mechanism can be self-participation of the borrower. Most commercial banks currently offer between 15 and 20% deductible, which he can finance with a consumer loan from the same bank.
The banking association says that at this stage they are not aware of any similar proposals of the BNB. “At the moment, we are not aware of any additional requirements that banks should apply when lending, as well as the reasons for their possible introduction”, it is written in their position.
According to financier Lyubomir Datsov, the reason for these actions is an attempt to control inflation, not a risk for the banking system. “This lending pumps up inflation, as it affects the price of housing, which is included in the inflation index,” he pointed out.
2024-01-29 17:38:37
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