Friday , August 19 2022

Slots, you collapse all the sleds: Are you complaining about mortgages? This school will get you!


As Slávek Mynář, director of product Slovenská sporiteľňa, said at a meeting with the media on Tuesday in Bratislava, currently there is a slight increase in debt growth on the market. However, as well as the new regulation, however, the decline of demand also has an impact, as people take out loans before the regulation starts to qualify. It is assumed that the impact of regulation will be more pronounced this year.

In the fourth quarter of 2018, Slovak banks had to have less than 30% with loans above 80 LTV (loan to value ratio – loan to value). They did not have a big problem with it, together they provided 27% of such loans. Even the most vulnerable group – individual candidates, have not even felt the reduction in credit availability. Before the NBS regulation came into force, on July 1, 2018, their share of loans was 46%, in the second half of the year it fell to a minimum of 44%. Slovakians don't even use the possibility to establish a second property to lower the LTV below 80%.

However, NBS regulation is gradually tightening, and this year is expected to have a more significant impact. However, banks will still have space to borrow with a higher LTV. The European Central Bank has been keeping the basic interest rate at the lowest level for several years. Although last year's analysts expect to raise the rate this year, today's estimates are different.

"The European Central Bank said that it was unlikely to change its interest rates until the end of 2019. Assuming economic growth in the euro area would not slow down, interest could rise for the first time in the first quarter of 2020. So, Interest rates for commercial banks are likely to be stronger this year not grow. " Mária Valachyová, chief economist of the bank, predicts.

As he said, Slovakians can still enjoy some of the cheapest mortgages in Europe. They are half cheaper than in the neighboring Czech Republic. This is also reflected in the price of real estate. Their prices rose by 6% last year and reached the pre-crisis levels 2008. Since then, however, the standard of living and disposable income of the population has risen, so price growth is in line with the fundamentals of the economy.

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