Romania still has some of the cheapest mortgages in the region

Romania has some of the cheapest mortgage loans in Central and Eastern Europe and at a similar level to those from Western Europe, considering the average 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 online mortgage broker Ipotecare.ro.

Thus, the average instalment for a mortgage required for buying a one-bedroom apartment in Bucharest holds a percentage of about 45% of the average wage registered at a national level, Romania having one of the best values of this indicator at a regional level.

Ipotecare.ro analysis considered the purchase of an apartment with a usable area of 50 square meters, with a value of EUR 92,500, through a fixed rate mortgage loan, of 5.45% per annum, this being the average interest rate of mortgage loans granted in Bucharest in the first quarter of this year.

The value of the indicator recorded in Bucharest is significantly better than that recorded in Athens, where the average instalment needed for buying the same apartment type represents 58% of the average wage registered at a national level in Greece, or Budapest, where the same indicator has a value of 74%. The average instalment recorded in Warsaw is about 94% of the average net wage recorded in Poland, while the average instalment required to buy a similar apartment in Prague is of 99% of the average wage registered in the Czech Republic.

”Mortgage interest rates in Romania reached a competitive level, being significantly lower than those registered in other countries in the region – for example, the average mortgage interest rate in Budapest is 7.3% and that in Warsaw is 8.3%. At the same time, the interest rates recorded in Romania are at a reasonable level compared to the levels registered in Western Europe, where the comparison is made with loans granted in Euros, not in the local national currency, the inflation rate in those countries being more than two times lower compared to Romania. Moreover, the costs of a credit transaction are much higher in Western countries: for example, the costs associated with the mortgage brokers are zero in Romania, where no commissions are charged, while in Western Europe countries additional costs of tens of thousands of Euros can be paid, considering all the commissions, taxes and insurances, all of which are calculated on property values at least double-triple compared to those in Romania”, said Alexandru Radulescu, managing partner SVN Romania | Credit & Financial Solutions, the exclusive partner of Ipotecare.ro.

The instalment / wage indicator registered in Bucharest is higher than that of the one registered in Berlin (39%) and of those registered in Rome and Madrid, where the calculated indicator has a value of about 41%. Thus, even if the mortgage interest rates registered in the mentioned cities and countries are lower by even two percentage points compared to those in Romania, the instalment / wage ratio values do not show such differences. At the same time, the Ipotecare.ro indicator has a much higher value in London, of 65%, and in Paris, of 85%.

In the analysis, the purchase of a one-bedroom mass-market apartment was taken into consideration, with a net surface of 50 square meters, delivered for at least 30 years and located outside the central and semi-central areas of the analysed EU’s capital cities. Also, a 25-year mortgage was considered, 15% 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.

Mortgage loans worth EUR 9.2 billion were granted in total in Romania in 2024, up 42% compared to 2023, according to the National Bank’s data – please note that this volume also includes refinancings, conversions, transfers and restructurings. The number of homes sold in Romania in 2024 was 6.6% compared to the result recorded in 2023, according to the statistics of the National Agency for Cadastre and Land Registration.