Romania ranks among EU countries with most accessible mortgage loans

A recent market report from online broker Ipotecare.ro and financial consultancy SVN Credit Romania has confirmed that Romania remains one of the European Union states with the most accessible mortgage loans. This assessment is based on average wages and the costs associated with purchasing a one-bedroom apartment through a 25-year mortgage.

In Bucharest, the average installment for buying a one-bedroom apartment accounts for approximately 40% of the average net wage at the national level. This figure has decreased from 43% at the end of 2023, largely due to a decline in mortgage interest rates, especially in the fixed-rate segment, which now represents over 90% of mortgage loans issued.

Alexandru Rădulescu, managing partner at SVN Credit Romania, noted, “Mortgage interest rates have decreased in all analyzed states over the past year, with a more pronounced drop in variable rates expected next year. Romania boasts some of the lowest interest rates in the region. However, it is important to consider that while our interest rates are competitive, the inflation rate in Romania is more than twice as high as in the Eurozone. Moreover, total costs associated with mortgage loans are significantly higher in other EU countries due to elevated home prices and additional costs such as fees, taxes, and insurances, which can total tens of thousands of euros.”

Comparatively, the average mortgage installment for a similar one-bedroom apartment in Budapest reaches about 68.7% of Hungary’s average wage, while in Warsaw, it accounts for approximately 84% of the average Polish wage. In Prague, the average installment exceeds the national monthly wage, sitting at around 103%. Lower percentages are observed in other European capitals, such as Rome (38%), Berlin (39%), and Madrid (44%). Notably, Paris is among the least accessible mortgage markets, with an average installment representing about 89% of the average national wage.

The analysis focused on purchasing a 50-square-meter, one-bedroom apartment located outside central and semi-central areas of EU capitals. The mortgage scenario considered included a 25-year term with a 15% down payment and a fixed interest rate for the first five years, excluding additional costs like fees and taxes.

In terms of overall mortgage activity, the National Bank of Romania reported that a total of €4.5 billion in mortgage loans were granted nationally in the first half of 2024, reflecting a remarkable 78% increase compared to the same period last year. This figure encompasses refinancings, conversions, transfers, and restructurings.