Romania has remained among the European Union (EU) states with the most accessible mortgage loans, considering the average wages at the national level and the costs of buying a one-bedroom apartment through a 25-year mortgage loan, according to a report by online broker Ipotecare.ro and financial consultancy and mortgage lending company SVN Credit Romania.

The average installment for buying a one-bedroom apartment in Bucharest came to hold a percentage of about 40% of the average wage at a national level, down from 43% a year ago. The drop came amid a decrease in mortgage interest rates, especially in the fixed rate segment, which represent over 90% of mortgage loans currently granted.

The same indicator has a value of almost 69% in Budapest, 84% in Warsaw, and 103% in Prague. Slightly lower values are recorded in Rome (38%), Berlin (39%), and Madrid (44%).

“Mortgage interest rates decreased in the last year in all the analyzed states, and a more pronounced decrease in variable interest rates will be recorded starting next year. We have among the lowest interest rates in the region, and when analyzing the differences between the mortgage interest rates applied locally and those in the Western European states, we should also take into account the inflation rate, which in Romania is more than twice as high as in the eurozone,” commented Alexandru Rădulescu, managing partner at SVN Credit Romania.

“In addition, the total costs of a mortgage loan are much 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,” he added.

The report considered the purchase of a mass-market one-bedroom apartment, 50 square meters net surface, delivered for over 30 years and located outside the central and semi-central areas of EU 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 analyzed country were taken into account.

Mortgage loans worth EUR 4.5 billion were granted in total at a national level in the first half of 2024, according to data released by the National Bank of Romania, up 78% compared with the first half of last year (the volume also includes refinancings, conversions, transfers, and restructurings).

irina.marica@romania-insider.com

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