The interest rates on Bulgaria’s housing mortgages have increased for both lev and euro currencies in June, showed the latest Bulgarian National Bank (BNB) figures.

The rates on euro-denominated consumer loans have increased by 0.08 percentage points on a monthly basis. Only local-currency consumer loans have recorded a drop, to 12.67 per cent. The average effective annual interest rates for home loans stood at 9.08 per cent for leva and 8.51 per cent for euro.

So far in 2010, the interest rates on Bulgarian mortgages denominated in euro have not manifested a clear downtrend or uptrend, fluctuating each month.

Nevertheless, lev-denominated loans have displayed a sharper decreasing trend, declining from 10.39 per cent in June 2009, while euro-denominated mortgages have exactly the same rate as a year earlier.

The downward movement of euro-denominated loans is being driven by the depreciating euro, bankers said.

In 2009, when the deposit war started to ease, they said that they wanted to bring down the rates on both loans and deposits. However, they said that this depends on the improvement of the broader economy, a development that would reduce both customers’ individual risk and economic risk.

At the same time, the interest rates on Bulgarian term deposits have returned to their autumn-2008 levels before the deposit war reached its peak. The average effective annual interest rate was six per cent for lev- and five per cent for euro-denominated deposits.

On an annual basis, deposit rates decreased at twice the rate of loan rates, by 26 per cent year-on-year for leva and by 23 per cent year-on-year for euro.

The rates on local-currency housing loams shed 12%, while those on single-currency loans failed to go down.

For businesses, rates dropped 28 per cent for deposits and eight per cent for loans.

Source: Dnevnik.bg