A government project, to reduce the impact of rising credit prices

Most of the beneficiaries who purchased apartments under the ”First Home” Program face difficulties following the increase of the interest rate to 12.97%. In order to reduce the impact of the increase in the price of loans, the Ministry of Finance has developed a draft law that provides for the compensation of interest by 50%.

“In order to reduce the risk of the beneficiaries of the Program becoming unable to pay, a risk with a major negative impact both on the well-being of citizens who receive mortgage loans partially guaranteed by the state, Prima Casa, and on the banking system, it was decided to cap the maximum increase in the annual interest rate during the period July 1, 2022-December 31, 2022 at a value that will not exceed 11.37%,” the draft law says.

At the same time, in order to reduce the financial burden of beneficiaries of mortgage loans partially guaranteed by the state First Home, who are persons with low to medium incomes, the Government decided to compensate, from the intervention fund, up to 50% of the interest increase for the period of July 1 – December 31, 2022.

The project provides for the allocation of funds from the Government’s intervention fund in the amount of 42,000 thousand lei. Until the revision of the maximum interest rate under the State Program First House of Mortgage Credits partially guaranteed by the State benefits more than 7700 people. On average, the interest increase after the revision of the maximum interest rate applicable for the second semester of 2022 is 1800 lei. Respectively, monthly to cover the need to compensate the beneficiaries, it will be necessary to allocate about 7000 thousand lei. The calculation and payment of the compensation will be carried out for the period July 2022-December 2022.

At the end of June, the National Bank of Moldova made public the reference indicator that will be applied to the formation of the maximum interest rate for First Home mortgages, an indicator that, compared to the value for the period January 1, 2022-June 30, 2022, has increased by 5 .35 percentage points. Due to the increase in the reference index, the maximum interest rate for “Prima casa” mortgage loans is approximately 11.97% for loans whose maximum applied margin was 2% and 12.97% for loans granted with a 3% margin.


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