11/09/2023
At today’s extraordinary meeting of the Executive Board, the NBS adopted the Decision on Temporary Measures for Banks Relating to Natural Persons’ Housing Loans, whereby it temporarily capped the interest rate for first-time beneficiaries of variable rate housing loans worth no more than EUR 200,000. The nominal interest rate payable by these borrowers will be temporarily capped for the next 15 months, starting from the October annuity, and banks will not have the right to claim from the borrowers any difference in interest arising from the application of the Decision.
For housing loans approved concluding with 30 July 2022, the nominal interest rate may not exceed 4.08% (the weighted average interest rate on the stock of housing loans in the Republic of Serbia published by the NBS as at 31 July 2022 increased by 30%). This means that the loan annuities of these borrowers will be reduced by 10% to over 25%.
Given below is the representative example of a loan approved on 1 December 2021 in the amount of EUR 100,000 at a nominal interest rate of 6М ЕURIBOR+3%, for a 25-year repayment term, and the effects of limiting the nominal interest rate to the level of 4.08%.
| Loan amount in EUR - 100,000 Interest rate - 3% + 6M EURIBOR Initial maturity - 25 years |
Current annuity |
Interest rate level | 6.95% |
| Annuity amount in EUR | 694 | |
Annuity after the measure is applied |
Interest rate level | 4.08% |
| Annuity amount in EUR | 532 | |
| Absolute annuity reduction relative to the current annuity amount (in EUR) | -162 | |
| Average relative change in annuity relative to the current annuity | -23% |
For housing loans approved from 31 July 2022 to the effective date of the Decision, whose initial interest rate exceeds 4.08%, borrowers will, concluding with December 2024, pay a reduced loan annuity with interest specified in the initial repayment plan. This means that these borrowers too are protected from the further rise in loan annuities, even though circumstances at the time of their borrowing clearly pointed to a possible further increase in EURIBOR.
Please note that the interest rate is limited only in terms of its further growth, while banks will be obligated to harmonise the annuity amount in line with the concluded housing loans agreements in case of any lowering of variable interest rates.
For housing loans approved after the effective date of the Decision, the following restrictions are prescribed during its application:
Furthermore, by this Decision, the NBS has enabled all housing loan beneficiaries, including those under fixed rate loans, to make an early loan repayment without the obligation to pay the early repayment fee, which equals up to 1% in case of loans concluded after 5 December 2011, or more in case of loans concluded before that.
With these temporary measures, the NBS has once again demonstrated a responsible and timely approach to preserving the stability of the financial sector and protecting citizens in the uncertain environment of fluctuating interest rates. The focus is once again on preventive action having in mind the current circumstances rather than waiting for the negative effects to materialise and non-performing loans to build up, when any response would be forced and, undoubtedly, of a limited scope. In this way, the NBS acknowledges and welcomes the demonstrated readiness and capability of housing loan beneficiaries to settle their liabilities on time, as evidenced by the minimum number of past due days under these loans. Finally, with the adoption of these temporary measures, the NBS expects that banks will make an additional effort to adjust their operations to the circumstances so as not to jeopardise the trust of existing and future clients, thus ensuring their sustainable business and future growth.
Governor’s Office
