Bulgarians shifted to borrowing mostly in leva on the mortgage market in September because of expectations that the local currency might start devaluating, thus leading to a cheaper credit price, a Credit Centre research showed, as quoted by mediapool.bg on October 14.

The share of leva-denominated mortgage loans in September was 46 per cent of all.

Credit Centre is a Bulgarian consulting company dealing with mortgage loans, serving as an intermediary between clients and 13 local banks.  It is owned by AG Capital, a holding structure involved in the real estate business.

Tihomir Toshev, head of Credit Centre said, as quoted by mediapool.bg, that they could not identify the source of information for the expected devaluation of the Bulgarian lev. The possibility of such a development was almost equal to zero, he said.

The prospect looks even worse for the borrowers, as most of their credit will be repaid after Bulgaria joins the so-called eurozone, i.e. introduces the euro as its official currency. From that moment on banks would start charging additional fees for recalculating the loans, which would make the loans in leva even more expensive.

A slight drop in mortgage borrowing was also registered in September, resulting from an increase in interest rates, Credit Centre said.
Credits of more than 100 000 leva were on the rise, and reached a share of 16.46 per cent of all loans extended in September, compared to 11.6 per cent in July, and 14.06 per cent in August. The most popular credit size continued to be between 40 000 and 60 000 leva, having a 54.63 per cent of all loans in September, Credit Centre said.

Source: Sofia Echo