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Banks have started approving housing loans with a ten percent stake for the purchase of the first apartment, which was recommended by the National Bank of Serbia (NBS) this summer. The truth is shy, because after the State Postal Savings Bank, Raiffeisen Bank has now decided to take that step. They say that 15 applications for this model of housing credit are currently being processed.
Just a few weeks ago, central bank governor Jorgovanka Tabaković said she regretted that banks did not accept that recommendation, but the situation appears to be slowly changing. We asked Zoran Grubisic, professor at the Belgrade Banking Academy, if other banks could follow suit from the competition. As a reminder, as an excuse for not having such a loan in their offer, the banks responded to follow their commercial policy and that their 20% stake serves as insurance against a possible drop in property prices.
– If Raiffeisen, as a large foreign bank, which is also in the top five in the domestic market in all parameters, starts approving such loans, this is expected to put pressure on other market participants. Especially those in the top five, among which the competition is the largest. Banks make money by placing money, and when money does not rotate, it is a lost profit for the bank. Like when someone has the most modern bus, but it does not carry passengers, which means it does not bring money to the owner, says Grubišić.
Remember that for a bank, a mortgage loan is a quality long-term placement and constitutes an important part of the portfolio of all banks. For such a customer, who, as a rule, transfers the profits to them, the bank also sells other services: checking account, various cards.
In Raiffeisen Bank you can obtain the loan with a repayment term of up to 30 years, and the interest rate can be set when it is 3.95 percent, as well as a variable of 3.24 percent plus the Euribor at six months, which is now negative so the interest rate is below three percent.
– The interest rate of this loan model does not depend on the participation amount, that is, it has remained unchanged. By reducing the stake, the bank did not transfer the risk to the client by increasing the interest rate. When changing the loan conditions, the bank does not base the risk assessment on the fact that competitors have the same offer, but is guided by the internal methodology and, in this case, by the recommendations of the National Bank of Serbia . We believe that the risk in this case is acceptable – they say in Raiffeisen.
From his experience, the demand for home loans has increased, and this is reflected in the growth of financing requests received by the bank.
Since the second half of June, the Postal Savings Bank has provided home loans to first-apartment buyers with a reduced participation of 10 percent. In your case, the interest on the amount of the approved home loan for the period of the first 36 months, that is, after the expiration of the period of 36 months until the date of the first interest rate adjustment, is fixed and amounts at 2.9 percent per annum for loans guaranteed by NMIC, or 3.6 percent for loans not guaranteed by NMIC.
After month 36, the interest rate is variable and is determined as the sum of the six-month Euribor and a fixed spread of 2.9 percent, or 3.6 percent annually.
– When it comes to buying the first property on credit, the initial costs and the participation itself have so far been an obstacle for clients when making such an important life decision. It was the timely decision of the NBS that created the regulatory space to modify and reduce the required participation of this specific customer segment. The results after five months of implementation, measured by the number of loans received and made with a participation of 10%, speak of an exceptional interest in this type of product, which only confirms that the measures adopted are very well oriented and obviously give the expected results. As for the level of interest rates on home loans, it has remained the same: the amount of the participation has no effect on the level of interest rates. A transparent approach to business and partnering with clients is something that has been a characteristic of the bank for decades and we are not going to deviate from that, especially considering that it is a state bank with a clearly articulated state interest – they say in this bank.
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