The interest rates on loans released as part of the “First House” State Program have declined. As from July 1, the highest annual interest rate on loans provided through this program is 10.87%, down 5.8 percentage points from the previous rate, IPN reports.

The Organization for Entrepreneurship Development (ODA) said the revision of the reference rate was possible following the decrease in the rate of inflation and the relaxation of the monetary policy by the National Bank of Moldova. This way, the monthly interest rates on loans paid by active beneficiaries will decrease significantly and the potential beneficiaries of the program will be able to take out new loans in more advantageous conditions.

“Since the beginning of this year, the interest rates on new deposits attracted by banks have constantly declined and this positively influences the interest rates on new loans provided by banks. Within the “First House” Program, the weighted average interest rate on new deposits attracted by banks serves as the reference rate. In May this year the rate was 7.62%, as against 13.42% in November 2022,” the ODA said in a press release.

The organization offers state guarantees on loans raised from commercial banks through the “First House” Program. Since 2018 until present, the loans released as part of this program totaled over 4.4 billion lei. There were purchased 8,113 dwellings. Out of the 8,113 beneficiaries, 5,571 are families, while 2,542 are unmarried young people. The average age of beneficiaries is 31 years.

As many as 7,566 of the bought dwellings are situated in urban areas, while 547 are located in rural areas. Over 90% are apartments, while 768 are private houses. The average area of a purchased dwelling is 61 square meters, while the average value is about 640,000 lei.