The maximum level of indebtedness will be 40% of the net income for loans in national currency and 20% for loans in foreign currencies as of January 1, 2019, while for loans for the purchase of the first house the maximum indebtedness rate is increased by 5 percentage points, according to the Regulation for amending and supplementing the National Bank (BNR) Regulation.
“According to the new provisions, the maximum level of indebtedness will be 40% of the net income for the loans in RON and 20% in foreign currency. The total indebtedness is determined as the weight of the total monthly payment obligations relative to the monthly net income. The maximum borrowing rate is increased by 5 percentage points for the loans for the first house to be taken over by the borrower,” a BNR press release informs.
The regulation applies to both banking institutions and non-banking financial institutions (IFN). Similar prudential measures have already been adopted in other countries such as Hungary, Poland, Estonia, Lithuania and the Czech Republic.
Thus, the amendments to the BNR Regulation no. 17/2012 will be published by the Official Gazette and will come into force as of January 1, 2019.
The Central Bank representatives argue that they have made this decision for the following two reasons: to simplify the access to credit for natural persons and to strengthen the sustainable lending growth; to protect middle-income and lower-income people with a view to improving their ability to pay for healthy credit.
According to the new calculation methodology, the level of credit and related rates will be easily determined by any applicant, BNR representatives say.
However, the maximum monthly rate will continue to be variable from one bank to the next.
The BNR representatives also argue that for the population’s sustainable growth of the lending activity, as of the beginning of the next year, there will be more permissive rules for the purchase of the first house that is to be taken over by the borrower. In addition, for the same purpose, the application of the indebtedness limit for a maximum of 15% of the new loan portfolio to natural persons, at the level of each creditor, will be eliminated, and the bank bureaucracy for credit will be reduced.