Romania has some of the cheapest mortgages in Central and Eastern Europe and at a similar level to Western European countries, taking into account average national salaries and the cost of buying a two-room apartment with a 25-year mortgage, according to a report by an online broker.
Thus, the average mortgage rate required to buy a two-room apartment in Bucharest is approximately 45% of the national average net salary, with Romania having one of the best values of this indicator at a regional level, shows Ipotecare.ro.
The company’s analysis took into account the purchase of an apartment with a useful area of 50 square meters, with a value of 92,500 euros, and a fixed interest rate of 5.45% – the average level recorded for mortgages granted in Bucharest in the first quarter of this year.
The value of the indicator recorded in Bucharest is significantly better compared to Athens, where the average rate required to purchase the same type of apartment represents 58% of Greece’s net average salary, or Budapest, where the same indicator reaches 74%. In Warsaw, the average rate accounts for approximately 94% of Poland’s net average salary, while in Prague, the required rate for purchasing a similar apartment amounts to 99% of the Czech Republic’s net average salary.
“Mortgage interest rates in Romania have reached a competitive level, being significantly lower than those recorded in the region—for example, the average mortgage interest rate in Budapest is 7.3%, while in Warsaw, it is 8.3%—and at a reasonable level compared to Western European countries, where comparisons are made with loans granted in euros rather than local currency, as inflation rates are more than twice as low as in Romania. Additionally, transaction costs for credit-based purchases are much higher in Western states. For instance, mortgage brokerage costs in Romania are zero, as no commissions are charged, whereas in Western Europe, additional costs can reach tens of thousands of euros due to commissions, taxes, and insurance, all calculated based on property values that are at least two to three times higher than those in Romania,” commented Alexandru Rădulescu, Managing Partner at SVN Romania | Credit & Financial Solutions, the partner of Ipotecare.ro, as cited in the statement.
The rate-to-salary indicator in Bucharest is higher compared to Berlin, where it stands at 39%, and to Rome and Madrid, where the calculated value is around 41%. Thus, even though mortgage interest rates in these countries are lower by up to two percentage points compared to Romania, the rate-to-salary ratio does not show significant differences. At the same time, the Ipotecare.ro indicator is much higher in London, at 65%, or in Paris, at 85%.
The analysis considered the purchase of a two-room mass-market apartment with a usable area of 50 square meters, completed at least 30 years ago, and located outside the central and semi-central areas of various European Union capitals. A 25-year mortgage with a 15% down payment and a fixed interest rate for the first five years was also factored in, excluding additional costs such as commissions, notary fees, or insurance. To determine the interest rate, fixed-rate mortgage loans from the top three banks in each analyzed country were considered.
In 2024, a total of €9.2 billion in mortgage loans was granted nationwide, according to data from the National Bank of Romania, marking a 42% increase compared to 2023, including refinancings, conversions, transfers, and restructurings. The number of houses and apartments sold nationwide in 2024 increased by 6.6% compared to 2023, according to statistics from the National Agency for Cadastre and Real Estate Publicity, while in Bucharest-Ilfov, 7.6% more homes were sold in 2024 than in the previous year, Agerpres reports.