Romania has among the most accessible mortgages in the European Union, considering the average net wages at a national level and the costs of buying a one-bedroom apartment through a 25-year mortgage loan, reveals a market report issued by SVN Romania | Credit & Financial Solutions, the financial consultancy and mortgage lending company within SVN Romania.
Thus, the average instalment for buying a one-bedroom apartment in Bucharest held, at the end of last year, a percentage of 43 percent of the average net wage at a national level, Romania having the best value of this indicator at a regional level and among the bests in the European Union.
In SVN Romania’s analysis, the purchase of a one-bedroom apartment was taken into consideration, with a net surface of 50 sqm, delivered for at least 30 years and located outside the central and semi-central areas of EU’s capital cities. Also, a 25-year mortgage was considered, 15 percent downpayment and a fixed interest rate in the first five years, without including the associated costs, such as fees, taxes and insurances. To determine the average interest rate, the mortgage loans with fixed interest rates from the top three banks in each analysed country were considered.
If SVN’s indicator has a value of 43 percent in Bucharest, the average instalment for buying the same apartment in Budapest reaches 80 percent from the national average wage in Hungary, while the instalment for buying a one-bedroom apartment in Warsaw holds a percentage of 83 percent of the average wage in Poland. At the same time, the least accessible capital city from Central and Eastern Europe is Prague, where the average instalment surpasses the average wage, the indicator having a value of 115 percent.
”The interest is not the only relevant indicator: even if Romania has higher interest rates compared to Europe’s Western countries, the total costs of a loan are significantly higher in the other EU member states, due to higher home prices but also because of the associated costs (fees, taxes and insurances), which can amount to tens of thousands of Euros. 2024 started with much more positive premises for the local mortgage market and we estimate that the interest rates will continue to decrease, with the following months bringing the first fixed yearly interest rates below 5.5 percent,” said Alexandru Rădulescu, managing partner SVN Romania | Credit & Financial Solutions.
The 43 percent level from Bucharest is being registered in a context in which over 60 percent of homes sold in Romania in 2023 were bought with cash, without a bank loan, according to SVN’s calculations based on the data of the National Agency for Cadastre and Land Registration and the National Bank.
