Will there be further relaxation of home loan rules?

Will there be further relaxation of home loan rules?
Willibald Cernko, Erste Group

The meetings regularly focus on the KIM Ordinance, which sets out the rules for granting housing loans. This time there could be another change, namely the rules for the exception quotas could be simplified. Both banks and the Ministry of Finance would be in favor of it.

  • also read: The fear of no longer being able to pay your loan installments

Last week, Erste Group boss and WKÖ banking division chairman Willibald Cernko was confident that an agreement would be reached on Tuesday regarding a simplification of the exception quotas. A change in this regard would be particularly important for smaller banks, as it would help them to make better use of the quotas, Cernko said at the time.

Still “excessive”

UniCredit Bank Austria boss and President of the Austrian Bank Association, Robert Zadrazil, also spoke out in favor of such a change. In his view, the Credit Institutions Real Estate Financing Measures Ordinance (KIM-VO) is still “excessive” and further measures are needed to promote affordable housing. “In our view, the priority now is to simplify the handling of the exception quota of 20 percent in conjunction with effective coordination of the funding measures at the federal state level,” said Zadrazil in a statement to the APA. In addition, the financing of renovations would have to be made easier.

The Ministry of Finance is also hoping for easing at tomorrow’s meeting. “Finance Minister Magnus Brunner continues to advocate for adjustments to the KIM-VO, in particular increasing and simplifying the exception quotas per credit institution would make the situation easier,” said the Finance Ministry to the APA.

Basic rules are not up for debate

According to Cernko, the basic rules of the KIM regulation are not up for debate. Since the KIM-VO tightened the rules in mid-2022, housing loans may no longer last longer than 35 years, the equity share must be at least 20 percent, and the repayment rate may not exceed 40 percent of the available net household income. The regulation is limited until June 30, 2025.

The FMSG has existed since 2014 and consists of representatives from the Ministry of Finance, the Fiscal Council, the Financial Market Authority (FMA) and the Austrian National Bank (OeNB).

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