Keepin touch

Whether you have a question, comment, suggestion or any problem in the purview of the government, send us your message and we will try to respond as soon as possible. If your problem is not in our purview, we will forward your message to the relevant institution.

The Government of the Republic of Serbia

In the service of citizens

Volksbank to give state subsidised housing loans

Belgrade, 13 October 2006

Serbian Minister of Finance Mladjan Dinkic and Director of the National Corporation for Housing Loan Insurance Aleksandar Jovic signed today a housing loan agreement with representatives of Volksbank.

Director of Volksbank executive board Dragisa Lekic said at a press conference held following the signing of the agreement that housing loans will be approved for a period of 30 years, with a 30% deposit and mortgage worth the amount of the loan.

Lekic specified that the interest rate for loans indexed in Swiss Francs will be 3.95%, while loans indexed in Euros will be extended at an annual interest rate of 5.39%.

According to Lekic, clients will also have the opportunity to obtain a housing loan without a contribution or deposit, or only with a contribution, but the debtor must not be above 65 years in age at the time of paying the last installment.

Housing loans in the amount of €10,000 to €100,000 for married couples younger than 45, with state subsidies will be approved by the Volksbank for a period of 25 years, with a 10% contribution.

The Serbian government will provide 20% of the amount of the loan, with a grace period equal to the period for which the loan is given and not longer than 20 years, at an annual interest rate of 0.1%, while the bank will finance 70% of the loan at an annual interest rate of 6.45%. The total interest rate for that kind of housing loan will stand at 4.88%.

Dinkic said that the Volksbank is the 17th bank in Serbia which has begun to give state subsidised housing loans, which are insured by the National Corporation for Housing Loan Insurance.

He recalled that the total annual interest rate for subsidised loans for those younger than 45 is worth some 4.5%, adding that this is lower or equal to interest rates for such loans in EU countries.

According to Dinkic, it is necessary to improve the legal system and introduce effective court procedures in order to lower the interest rate for the rest of housing loans, which on average are 6.3% for loans indexed in Euros.

The National Housing Loan Insurance Corporation has so far insured 6,200 loans worth €172 million, and the state subsidised a total of 1,800 housing loans with €17 million.

The Minister added that the number of applications for state-subsidised housing loans is increasing because the interest rate is very low, and because the price of registration of such flats has dropped from 80,000 to 4,000 dinars.

Our projection is that in the next four years, if the tendency of growth of GDP continues, approximately 80,000 housing loans will be insured by the National Corporation, and the state will secure subsidies for at least 30,000 loans in the given period, Dinkic said.

He said that the state will try to improve citizens' living standards and boost employment so that a greater number of citizens could afford a housing loan.