Promotions are being offered by major market players, such as Banca Transilvania and Raiffeisen Bank, and by small banks, such as Millennium Bank and Marfin Bank. Analysts said that the decline in revenues is forcing banks to promote lending.
“When banks are not granting loans, the profit is dropping. Considering there is no demand for loans, lenders must cut interest rates. If these cost reductions are insufficient, we will see new cuts in interest rates in the near future,” said Nicolae-Alexandru Chidesciuc, Senior Economist of ING Bank Romania.
Banca Transilvania is offering an eight percent fixed annual interest until 1 January 2011, after which the interest will be EURIBOR 6M plus an eight percent margin. The maximum loan value is €250,000, while the minimum mortgage down payment is 15 percent. The bank imposes an indebtedness degree of 60 percent of the applicant’s income, and the loan is granted for up to 30 years.
Millennium Bank offers mortgages with a 30 year maturity, and the interest is EURIBOR 3M plus an eight percent margin on euro and ROBOR 3M plus a 10 percent margin for national currency credits. The loan amounts to 70 percent of the value of the acquired home but no more than €300,000.
