WE BORROW SMALLER AND SMALLER MORTGAGE LOANS AND REPAY RAPID LOANS IN ADVANCE

Households and individuals in our country borrow smaller and smaller mortgage loans and repay early their credits from non-banking institutions, showed an analysis of the Credit Center and the NetCredit companies.

"Despite the improving conditions for financing of residential estate proposed by banks, recently, people are inclined to use minimal external financing for the purchase of property," experts reported. According to Tihomir Toshev, Executive Director of the Credit Center consulting company, in 2008, a "small" mortgage loan was a loan of €30,000 but, today, amounts of less than €10,000 are no exception and neither banks, nor consultants consider these unnatural.

"In the years of the boom, a price difference of €3,000- 5,000 was easily acceptable and households used to venture beyond their initial budgets but, now, they are strictly disciplined. This makes today's borrowers much more reliable and their credits - low-risk," explained Toshev.

The analysis of the Credit Center noted that people increasingly prefer to withdraw mortgage loans with fixed interest rates, as this makes the planning of their expenditures easier.
At the end of March, the average size of withdrawn loans stood at €29,497 given that it was €34,860 in the previous month and the main reason for this development is the customers' reluctance to run into heavy debts.

The data of the company shows that loans of €30,000 are the most preferred. However, the percentage of funding, in general, is between 70-80% of the purchase price. Tihomir Toshev explained to Klassa that the difference between the small average loan and the large percentage of funding comes from the increased number of transactions in smaller towns. He said that in cities like Sofia, Plovdiv and Varna customers usually borrow some 50% of the funds needed from banks, buying mostly smaller and cheaper housing.