Credit for citizens for home purchases is limited, the Bank of Albania's decision is published in the official gazette

The decision of the Bank of Albania to limit loans for citizens to purchase a home has been published in the official gazette. The central bank's decision states that no bank will provide loans to citizens who want to buy their first home for more than 85% of its value.

While those seeking a loan to purchase a second home, the loan amount they will be able to receive when it is in lek will be 80% of the property value.

For a loan taken out in lek, the loan installment should not be more than 40% of the citizen's income. So if the monthly income is 100 thousand lek per month, the installment should not be higher than 40 thousand lek.

Whereas when the loan is requested in foreign currency, for the first house the loan value will be up to 75%, and decreases to 70% for the second property. As for the monthly installment, it should be up to 35% of the income value.

The maximum term for loan repayment will be up to 30 years, or another term will be set by the bank taking into account the borrower's age, in order to avoid having to repay a loan at retirement age.

This decision by the Bank of Albania was taken to protect banks from a deterioration in the solvency of borrowers in conditions where the increase in property prices is unstoppable. (A2 Televizion)