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| Banks fight for clients |
| Bratislava, 25.03.2016 |
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| New mortgage law seems favourable for borrowers, but they need to be careful.
Come and get a cheaper loan is the main message of numerous banking ads. Bold statements about the most favourable interest rates follow the changes to the law on home loans and also good conditions in the financial markets resulting from current policy of the European Central Bank, analysts agree.
The changes to the home loans, which came into effect on March 21, introduce lower fines for clients who want to refinance their mortgage, dropping from some 5 percent to below 1 percent.
“With such change people are able to decrease their interest rates on mortgages immediately,” said Maroš Ovčiark, executive director of the Finančný Kompas website dedicated to the comparison of banking products, as quoted by the TASR newswire, “they do not need to wait for the end of the fixed period when they can refinance it free of charge.”
Though the changes may increase the number of clients changing the banks and picking advantageous mortgages, analysts warn that not all offers promoted in advertisements are true and the final interest rate may be higher.
Better conditions for clients
Paying off an old mortgage with a new, cheaper one will not cost thousands of euros any more, as banks can charge a fee of only up to 1 percent for a mortgage repaid early. Originally the fee might have been as high as 5 percent.
Thus when paying off a mortgage in the amount of €50,000, now the fee cannot be higher than €500. Clients were charged between €1,000-3,500 for the equivalent amount until March 18, the Pravda daily wrote.
Moreover, the clients will be able to pay one extra instalment amounting to 20 percent of the borrowed sum once per a year, free of charge, the SITA newswire reported.
Moreover, clients will get more detailed information about their mortgage and the instalments already before signing the contract or if they want to pay it off with another loan. They will also receive more information about the type of interest rate, the total amount of the mortgage or potential future costs which are not included in the final sum, TASR wrote.
The amendment also enables the clients to terminate the agreement without stating the reason within 14 days after signing the deal.
The new rules should also contribute to better evaluation of a client’s solvency. The banks should, first of all, take into consideration the ability of clients to pay off their loan and the external factors which might impact this ability.
They also modify conditions for providing a loan in foreign currency, complaints and reclamations, and also conditions for out-of-court settlement of disputes. The changes will also impact the supervision over providing the home loans, TASR reported.
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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