For most buyers, financing decides not only what they can afford but also how soon they can buy. In Romania there are two main routes: a standard mortgage from a bank and state guaranteed government programmes, known in recent years as Prima Casă and later Noua Casă. Below we explain the differences in plain language, without promising figures that change often.
How a standard mortgage works
The bank lends you part of the property value and the property becomes collateral through a mortgage. You pay a deposit from your own funds and repay the rest in monthly instalments over a period that can run to several decades. The deposit percentage, interest and costs depend on the bank’s policy, your income and the type of property.
Advantages
- More flexibility on the type and value of the property.
- You can also use it for a second home or an investment.
- The process is usually faster, with no extra approval stages.
What to keep in mind
- The deposit required is usually higher than with guaranteed programmes.
- The interest rate depends on your profile and the bank’s commercial offer.
What state guaranteed programmes are
Through these programmes the state guarantees part of the loan via the National Credit Guarantee Fund for SMEs (FNGCIMM). The guarantee lowers the bank’s risk, which allows a smaller deposit for buyers who meet certain conditions. Typical conditions concern it being your first owned home, a price cap for the property and a guarantee fee.
The rules of these programmes have changed several times: caps, minimum deposit, eligible homes and even the annual budget. So before any decision, check the up to date information on the FNGCIMM website and talk to a partner bank.
Advantages
- A smaller deposit, which helps you buy sooner.
- Standardised terms that are easy to compare between banks.
Common limitations
- A cap on the property value, sometimes different for new and older homes.
- Restrictions on selling or renting during the first years.
- A guarantee fee that adds to the total cost.
- Extra steps and, at times, waiting because of the allocated budget.
Fixed or variable rate
A fixed rate gives you predictability: the instalment stays the same for the fixed period, usually a few years. A variable rate is the bank’s margin plus a reference index, and the instalment can go up or down over time. Many offers combine an initial fixed period with a variable rate afterwards.
Ask yourself how comfortable you are with an instalment that can change. If your monthly budget is tight, predictability has real value. If you have a solid reserve, you can accept variation more easily.
APR: the number that matters
The annual percentage rate (APR, DAE in Romanian) includes the interest and most mandatory costs: fees, insurance required by the bank and other charges. It is the best tool to compare different offers. Two loans with the same interest rate can have a different APR because of costs hidden in the details.
Steps to getting a mortgage
- Preliminary assessment: the bank checks your income and credit history and tells you the maximum amount.
- Choosing the property and signing the preliminary contract, with a clause covering loan approval.
- Property valuation by a valuer accepted by the bank.
- Final approval and preparation of the loan agreement.
- Signing at the notary of the sale contract and the mortgage contract on the same day.
- Funds transferred to the seller.
Typical documents for the file
- Identity document and, where relevant, marriage certificate
- Income certificate or documents for self employed income
- Bank statements for recent months
- The preliminary contract and the property documents
- The valuation report
How to compare offers, step by step
- Ask every bank for a simulation with the same amount, term and deposit.
- Write down the APR, monthly instalment, total cost and early repayment terms.
- Check which extra products are required for the advertised rate (current account, card, life insurance).
- Work out what happens to the instalment if the reference index rises by one percentage point.
Mistakes to avoid
- Choosing only on the advertised interest rate.
- Signing the preliminary contract without a clause for loan refusal.
- Using your entire reserve on the deposit, with nothing left for the notary and moving.
- Changing jobs right in the middle of the assessment.
Early repayment and refinancing
It is worth knowing from the start what early repayment costs. For variable rate loans, consumer protection law generally limits these fees, while fixed rate loans may carry costs during the fixed period. If you find a better offer a few years later, refinancing with another bank is an option. Work out all the new costs (valuation, notary, fees) before you decide.
Insurance
The bank usually requires the mandatory home insurance plus an optional property policy assigned in its favour. It may also ask for life insurance in exchange for a better rate. Check whether you can choose the insurer or must use the bank’s partner, because the cost difference over the whole loan term can be significant.
Frequently asked questions
Can I use a state guaranteed programme for a second home?
Generally, guaranteed programmes are aimed at people buying their first home or who do not currently own one, under the conditions of each edition of the programme. Check the current rules on the FNGCIMM website.
Is a fixed rate better?
It depends on your budget and risk tolerance. A fixed rate brings predictability during the fixed period, while a variable rate may start lower but can change. Compare offers on APR and simulate rising rate scenarios.
Can I add a co borrower?
Yes, many banks accept one or more co borrowers, usually family members. Their income counts towards the maximum amount, but they also become liable for repaying the loan.
What next
Use the mortgage calculator to see an estimated instalment, then search for homes within your budget with the apartment filters. If you would like help comparing offers or choosing a home, get in touch and we will connect you with an advisor.
