Erste bank cuts interest rates on existing EUR and HRK housing and renovation loans

Zagreb, 7 December 2015 – As of 1 February 2016, Erste&Steiermärkische Bank d.d. will cut interest rates on the existing housing and renovation loans with currency clause in euro, as well as housing and renovation loans in kuna. The correction of interest rates is a consequence of the decrease of the fixed part of the interest rate, i.e. it is not a result of the regular alignment of interest rates based on the changed values of its changeable part (EURIBOR, national reference rate) in the end of the reference accounting period.

The interest rate on the existing housing loans with currency clause in euro will be reduced by 0.9 percentage points on the average, so the new interest rate will range from 5.05% to 6.05%. The interest rate on the renovation loans with currency clause in euro will be reduced by 0.3 percentage points on the average, with the new interest rate ranging from 5.95% to 6.70%. The decrease of the interest rate on the existing housing and renovation loans in kuna, which account for a small part of the total retail loans portfolio, will amount to 1.05 percentage points on the average. The new interest rates on those loans will range from 5.19% to 6.29%. The precise calculation of the interest rate decrease may differ in individual cases and it will depend on the specific elements of each loan, i.e. its model and the credit risk assessment of the client, as well as his status.

The cut of interest rates will be implemented automatically and shall apply from 1 February 2016, i.e. to the annuities maturing in March next year. Clients can get the decreased interest rates even sooner, by signing annexes to loan agreements. In that case, the new interest rates will apply starting from the first of the month in which the annex was signed.

Considering that the decrease of interest rates applies to both existing housing and renovation loans with the currency clause in euro, it will also apply to the converted CHF loans after the annexes to loan agreements were signed.

An example calculation showing the decrease of interest rate on a housing loan with currency clause in EUR, approved on 1 December 2005