2024-04-30 19:35:14
People should be careful not to spend more than 30% of their monthly income on loan payments. This was stated by the deputy chairman of the Association of Credit Intermediaries, Deyan Vasilev.
Banks are breaking records in lending, warn economists. In the first three months of 2024, newly granted loans were 49% more than those granted in the first quarter of 2023. Against this background, the BNB warned of open violations at credit institutions, but without specifying who they were.
“The greater lending is due to three factors. The low interest rates on mortgage loans, with Bulgaria being a world record holder with 2.5%. The increasing incomes of the Bulgarians, the increasing gross domestic product, we are setting records in terms of savings in the banking sector with zero interest. This allows banks to grant loans at low interest rates. People see that inflation is eating up their savings and decide to buy homes,” Vassilev commented. He added that property prices in Sofia are not higher than in other countries.
“People should be careful not to spend more than 30% of their monthly income on loan payments. It’s good for them to have a buffer set aside, if they happen to be unemployed, to be able to repay all loan installments without it affecting them,” Vassilev explained.
The expert commented on the cabinet’s decision to keep the VAT on bread and flour at 0%. “Sometimes the temporary measures of zero VAT increase the profits of traders. It is proper for people who sell bread to calculate their profits against VAT,” Vassilev told NOVA. According to him, monitoring markups is a very difficult process that can be very easily manipulated.