The home loan is a loan by which a person can purchase or renovate a home with another property or the purchased home being used as collateral. The National Bank of Moldova published information about mortgage within the awareness-raising campaign conducted in concert with the National Commission for Financial Markets as part of the financial education campaign “Learn. Give sense to money”, IPN reports.

Mortgage is provided for a long period and is repayable in even 25 years, in national currency or in a foreign currency, US dollars or euros. The effective annual interest rate on loans in foreign currency is usually lower and this makes the given loan apparently more attractive. If the leu depreciates, the monthly mortgage rates on the loan in foreign currency will grow, especially in case of a powerful depreciation.

The mortgages released by the national financial institutions have a floating rate and this impacts directly on the monthly payments. For example, if we raise a loan of 600,000 lei repayable in 20 years, the rise in the interest rate by 1 percentage points will lead to a rise of about 400 lei in the monthly rates.

The authors of the campaign note that the governmental program “First House” offers advantageous lending conditions and is intended for any citizen aged between 18 and 45 who work officially. Some categories of beneficiaries, such as families with many children and employees with low incomes, can get compensations from the state for partially covering the monthly payments.