Payment None n.a. n.a. Introductory Discouraged N.a. shock, rates are by ex-post introductory prohibited fixing of rates spread to initial Payment None FX-LC Max 25 year None None FX lending shock, balloon preferential amortization prohibited, no risk* conversion assumption. rules on LC option & FX negative debt ceiling amortization. Payment None Caps on None None Retroactive Interest rate shock, rates interest rate indexation, cap increases spread fixed mandatory. to initial level. Reference Not Mandatory Not mandatory, Mandatory Mandatory index mandatory, (interbank, interbank rate is market (interbank). (interbank). gov bond). practice. lending market practice. Spread fixing None. 3 years and None. Life of loan over Life of loan longer over index over index index Early Universal Universal Universal right. Universal Universal Universal right, repayment right, right, yield Indemnity subject to Indemnities right, Indemnities indemnities maintena-nce negotiation. limited to 1%. Indemnities limited to 2%. banned. indemnity banned. max 3 yrs. Income stress None Min income Cumulative FX (30%) Cumulative FX None None for FX is 15 and interest rate (400 shock and times bp) shock interest rate minimum shock wage, or income in FX. Restructuring No FX conversion. Severe eviction delay Moratorium N.a. Extrajudicial & foreclosure, insolvency discouraging lifted in late 11, foreclosure. Quarterly consumer regime foreclosure. foreclosure foreclosure insolvency (plans for encouraged. quota. No 2009 consumer 2012) . 2006 consumer insolvency insolvency law. insolvency law. regime (Central bank proposal). Sources: author’s interviews conducted between December 2011 and February 2012. Notes:*negative or zero amortization in local currency (FX is a negative amortization product, if the local currency devalues). Abbreviations: APRC Annual Percentage Rate of – Charge (effective interest) CP Consumer Protection, CI Credit Institution, FX Foreign Currency, LC Local Currency, LTV – – – – – ratio, PTI Debt to income ratio. –
Payment shock, introductory rates None n.a. n.a. Introductory rates are prohibited Discouraged by ex-post fixing of spread to initial N.a. Payment shock, balloon risk* None FX-LC preferential conversion option & FX debt ceiling Max 25 year amortization assumption. None None FX lending prohibited, no rules on LC negative amortization. Payment shock, rates None Caps on interest rate increases None None Retroactive indexation, spread fixed to initial level. Interest rate cap mandatory. Reference index Not mandatory, lending market practice. Mandatory (interbank, gov bond). Not mandatory, interbank rate is market practice. Mandatory (interbank). Mandatory (interbank). Spread fixing None. 3 years and longer over index None. Life of loan over index Life of loan over index Early repayment Universal right, indemnities banned. Universal right, yield maintena-nce indemnity max 3 yrs. Universal right. Indemnity subject to negotiation. Universal Indemnities limited to 1%. Universal right, Indemnities banned. Universal right, Indemnities limited to 2%. Income stress None Min income for FX is 15 times minimum wage, or income in FX. Cumulative FX (30%) and interest rate (400 bp) shock Cumulative FX shock and interest rate shock None None Restructuring & foreclosure, consumer insolvency No insolvency regime (plans for 2012) . FX conversion. Quarterly foreclosure quota. No insolvency regime (Central bank proposal). Severe eviction delay discouraging foreclosure. 2009 consumer insolvency law. Moratorium lifted in late 11, foreclosure encouraged. 2006 consumer insolvency law. N.a. Extrajudicial foreclosure. Sources: author’s interviews conducted between December 2011 and February 2012. Notes:*negative or zero amortization in local currency (FX is a negative amortization product, if the local currency devalues). Abbreviations: APRC – Annual Percentage Rate of Charge (effective interest) CP – Consumer Protection, CI – Credit Institution, FX – Foreign Currency, LC – Local Currency, LTV – ratio, PTI – Debt to income ratio.
CEE_Mortgages_NBP_PAPER_Final_3_12_14.docx