Romanians pay loan instalments with annual effective interest rates almost double compared to many European countries, reports ActMedia.
Eurostat data shows that the average annual effective interest rate on mortgage loans in Romania is 6.5%.
But the European average stands at an average of 3.8%. Better rates are found in Germany and France, while Hungary and Poland stand in a roughly equal situation to Romania.
What’s more, Romanian interest rates reach 10.2% when it comes to consumer loans – compared to the European average ranging between 5% and 6.5%.
“Accurate information and cost optimization are essential when Romanians make credit plans. Although interest rates are higher, there are solutions to reduce these costs through careful comparisons and brokerage services. Refinancing or direct negotiations with the bank can make a considerable difference in the long term,” explains Valentin Anghel, CEO of AVBS Credit Broker.
Spotmedia.ro reverals key elements that underlie this difference:
- Inflation rate: Romania had one of the highest inflation rates in Europe, compared to the European average in 2023. Banks adjust interest rates to compensate for economic risks.
- Perception of risk: The Romanian economy is considered riskier compared to the eurozone countries, leading to the application of higher interest margins.
- Financing costs: Banks in Romania have access to funding at higher costs compared to those in developed Europe, which is reflected in the interest rates offered to customers.
The average monthly salary in Romania is around 3,500 to 4,000 Romanian Lei (RON) before taxes, equal to approximately 700 to 800 Euros.
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