National Bank tightens lending conditions from December 1
National Bank cuts maximum debt-to-income ratios by five percentage points and shortens repayment terms; first-time home buyers keep easier conditions.
From December 1 this year borrowers in North Macedonia will face tighter conditions when applying for bank loans, after the central bank moved to lower permitted debt-to-income limits and shorten repayment terms for certain housing-related consumer credits.
The National Bank of the Republic of North Macedonia published the new rules on October 2. They cut the maximum allowed share of a borrower’s total monthly credit obligations in relation to their income by five percentage points.
New numeric limits
Under the changes the cap for loans denominated in denars is reduced from 50% to 45%, while for loans with a foreign-currency component the limit falls from 45% to 40%.
As a concrete example, a person with monthly earnings of 60,000 denars who until now could carry total monthly credit obligations up to 30,000 denars under the general denar-credit limit, will from December be restricted to 27,000 denars.
The reform also shortens the repayment period for housing and mortgage-style consumer loans, a measure aimed at reducing long-term household leverage. The central bank preserved more favourable rules for citizens buying their first home.
Banks will need to apply the new ceilings and terms when assessing loan applications after the December 1 effective date, which may reduce the maximum size of new loans available to many borrowers.
Photo: press material from the event
