The Central Bank of Estonia declared changes in the requirements for mortgage borrowers. New rules for housing loans are to be officially sent to country’s commercial banks in November 2014 and will come into force in January 2015, says the ee24.com with reference to The Baltic Course.
It is planned that the new rules will prevent overheating of the real estate market in Estonia. The requirements will apply to all banks operating in Estonia, including branches of foreign banks.
Nuances of new mortgage rules in Estonia, valid since 2015:
- The loan amount should not exceed 85% of the real estate value in Estonia. Only KredEx bank is allowed to give up to 90%.
- Monthly payments – no more than 50% of the net income of the borrower.
- Mortgage loans available for up to 30 years.
- Terms apply to individuals who take mortgages for purchase, construction or renovation of real estate in Estonia.
- For some solvent borrowers exceptions to the rules are allowed. The proportion of such investors should be 15% of all mortgage loans issued in a particular bank during the month.
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