The mortgage market in 2017

After an extremely active year of 2016 in terms of mortgage lending, the expectations of the consultants in the "Credit Center" for 2017 are that the trend of growth in mortgages will continue, and the projected growth in new mortgage will move in the range of 15-20% . "The average size of mortgage loans will slightly increase, as the country will move within the range of 90000- 100000 lev and the capital will be between 120 000 and 130 000 Levs. The decline in mortgage interest rates in 2016 exceeded the expectations of the consultants and at the end the of year the promotional bank offers interest rates moved within 3.6-4.3%, and for the entire 2016 the average levels were between 3.9 and 4.9 percent", summarizes the CEO of the credit consultants of the „C redit Center".
According to them largely possibilities to reduce the mortgage interest rates in Bulgaria have been exhausted, but highly competitive market can take them off a bit, as in 2017 the expert expect to move within 3.5-4.5%. "The percentage of funding will continue to be up to 90 percent this year and so far we do not expect a bank to offer 100 percent financing offers like there were some before the crisis" the experts say.
The past year will be remembered also with the entry into force of the Law for loans to real estate users, which largely regulates mortgage lending market and the performance of credit consultants. "The benefits of the law will be seen mostly in 2017, when it entered into force in respect of the operation of credit consultants“.
Among the highlights in the period was the fact that the refinancing of mortgage loans has become a niche in the market and almost all banks have special offers to refinance mortgage loans to their competitors. "Customers increasingly take advantage of this opportunity and during 2017 is expected 15% of all new mortgages to be for the purpose of refinancing existing obligations" commented experts from the "Credit Center".
The purchase of property under construction was one of the most active segments of the property market in 2016, as it is also expected that the trend will continue in 2017. Many investors have launched or are preparing new projects with good location and although the prices of apartments under construction equaled and in some cases exceeded the price of finished apartments, the interest in them is increasing and most projects are sold before the building can be put into operation. The financing of such purchases, however, still will be possible only after act 14 of the building is aqcuired.