Credit is an extremely important financial instrument for the majority of people, especially for young people buying their first property. In order to resolve the housing issue, the primary concern of customers is whether they are creditworthy and how much their monthly payment will be. However, it is not enough to focus only on the approval of the credit or the affordability of the current monthly payment as a mortgage is paid off over a long period. Banks offer different mortgage options that need to be understood. If you understand the terms, you will be able to negotiate and choose the option that is acceptable to you in the long run. The exchange rate risk is associated with the possibility of changing the monthly payment amount depending on the exchange rate of the currency that is associated with the credit. With mortgage loans involving a currency clause there is an exchange rate risk, and depending on the exchange rate change, the monthly payment amount also changes. The interest rate risk is associated with the possibility of changing the monthly payment amount depending on the change in the interest rate. It is easy to understand what one of the conditions means that is not a condition of a mortgage but a decisive condition in the determination of a monthly payment. Reasonably, one can expect that during the loan repayment term, the exchange rate that was valid on the day of the agreement will fluctuate to higher and lower values. The interest rate risk is involved in mortgage lending, as there are two types of interest rates that can be included in loans. A fixed interest rate is invariant in case of rising market interest rate (advantage of fixed interest rate). The advantage of variable interest rates is the possibility of falling below the initially agreed upon level. The variable interest rate is composed of two parts: Variable interest rate = fixed part + variable, dependent part (reference rate). Variable interest rates are regulated by law from 01.01.2013 by the Law on Consumer Lending by the manner that the interest rate must be tied to a publicly announced reference rate. The Difference between National Reference Rate (NRS) and EURIBOR: For mortgage loans the 6M NRS1 is most often used, which is calculated as the cost of sources of funds of the Croatian banking sector for a period of 6 months for deposits of physical persons. NRS is lagged while EURIBOR is not lagged, which means that the change in EURIBOR will be more serious variable rate. Is there a maximum interest rate in Croatia? For the purpose of consumer protection, the Law on Mortgage Consumer Lending defines the maximum interest rate. The law defines the maximum interest rate that cannot be higher than the average weighted interest rate of such loans. Prior to the selection of a bank and type of credit, it is necessary to inform yourself well about all the terms of the credit so that you can make a decision that is the best for you at this time.

About us

Information

Services

About us

Information

Services