Supporting Regulations and Subsidies for Local Currency Mortgage Lending Croatia Hungary Poland Romania Serbia Turkey 2011 LC % 0% Ca 80% 62% Lower than 0% 100% (housing) 20% Main Property Property Property Property Property Not impediments market and market market market market and applicable. for LC lending banking euroized. euroized. euroized. banking system High real system euroized. euroized. High real High rates. inflation High real High inflation level (Tilt). level. High inflation level (Tilt). Regulatory LC offer No No No No Yes Only LC support mandatory lending permitted LTV & PTI No LTV or LTV 80% (vs. No LTV LTV 85% (vs. No LC LTV Not differentiation PTI diff. 60% EUR). limits. Higher 75% EUR). limit. Public applicable. PTI 30-50% PTI (50%). Public 95% 95% LTV for (by income, LTV LC pgm. LC. vs. 23-38% Severe FX Severe FX for EUR); stress test. stress test. (FX 80%). min income Higher PTI for FX. (by 20% points). Deferral of Possible. IO explicitly Discouraged Introductory Not interest or prohibited, by applicable. amortization but negative underwriting discouraged. for LC product amortization regulations IO possible. is not. Negative amortization seen as restructuring. Subsidies Downpayment Bauspar** Bauspar ** Savings for Bauspar** None. None. savings (30% housing subsidies premium, programme (15% (25% supporting LC min 4 years) premium, premium, up product discussion. down from from 15%, 25%; 5 min 5 years). years). Interest rate None New HUF None (earlier Public Zero None subsidies for interest rate programme interest rate LC product buy down** abolished). interest loan*** limits. Public None None None Public Public None insurance & programme programme loans not focused not focused supporting LC on LC. on LC. product Likelihood of Zero, public Low, unless Moderate to Moderate, Zero, unless Not strong support LC product high, with with greater LC product applicable. increase in LC unlikely. redesigned. greater public redesigned. support.
Supporting Regulations and Subsidies for Local Currency Mortgage Lending Croatia Hungary Poland Romania Serbia Turkey 2011 LC % (housing) 0% Ca 80% 62% Lower than 20% 0% 100% Main impediments for LC lending Property market and banking system euroized. High real Property market euroized. High real rates. High inflation level (Tilt). Property market euroized. Property market euroized. High real High inflation level. Property market and banking system euroized. High inflation level (Tilt). Not applicable. Regulatory support LC offer mandatory No No No No Yes Only LC lending permitted LTV & PTI differentiation No LTV or PTI diff. LTV 80% (vs. 60% EUR). PTI 30-50% (by income, vs. 23-38% for EUR); min income for FX. No LTV limits. Higher PTI (50%). Severe FX stress test. LTV 85% (vs. 75% EUR). Public 95% LTV LC pgm. Severe FX stress test. No LC LTV limit. Public 95% LTV for LC. (FX 80%). Higher PTI (by 20% points). Not applicable. Deferral of interest or amortization for LC product Possible. IO explicitly prohibited, but negative amortization is not. Discouraged by underwriting regulations Introductory discouraged. IO possible. Negative amortization seen as restructuring. Not applicable. Subsidies Downpayment savings subsidies supporting LC product Bauspar** (15% premium, down from 25%; 5 years). Bauspar ** (30% premium, min 4 years) Savings for housing programme discussion. Bauspar** (25% premium, up from 15%, min 5 years). None. None. Interest rate subsidies for LC product None New HUF interest rate buy down** None (earlier abolished). Public programme interest limits. Zero interest rate loan*** None Public insurance & loans supporting LC product None None None Public programme not focused on LC. Public programme not focused on LC. None Likelihood of strong increase in LC Zero, public support unlikely. Low, unless LC product redesigned. Moderate to high, with greater Moderate, with greater public support. Zero, unless LC product redesigned. Not applicable.