National Bank limits loan terms and installments for citizens

The National Bank has approved new rules for banks concerning lending conditions for citizens. Starting on December 1, the ratio between the monthly installment and the borrower’s income will be reduced by 5 percentage points. For denar-denominated loans, the maximum installment may not exceed 45 percent of monthly income, down from the current 50 percent. For foreign-currency loans, the limit will fall from 45 to 40 percent. At the same time, repayment periods will also be shortened: housing loans may be repaid over a maximum period of 25 years, instead of 30.

According to the NBRM, the changes provide for a 5-percentage-point reduction in the maximum DSTI ratio, from 50% to 45% for denar-denominated loans and from 45% to 40% for loans with a foreign-currency component. This ratio determines the share of monthly income that may be used to repay loans. The exception is loans for the purchase of a first home, for which the limits will remain at 50% and 45%. The maximum term for housing loans will be reduced from 30 to 25 years, while the term for mortgage-backed consumer loans will be cut from 20 to 15 years. For the purchase of a first home, the maximum repayment period will remain 30 years.

The National Bank explained that the aim of these measures is to prevent risks that could arise from households becoming excessively burdened with debt, at a time when the banking system is considered healthy and stable.

“The National Bank introduced these macroprudential measures for the first time in July 2023, while their implementation was further strengthened in December 2025. The data available so far show an improvement in the structure of new lending, with a decline in lending to households with higher debt burdens. Therefore, the additional measures are preventive in nature and are aimed at limiting, in a timely manner, potential risks arising from excessive debt burdens before they materialize,” the NBRM said.

According to the central bank, the decision was made at a time when the banking system is stable and no systemic risks have been identified. The quality of the loan portfolio of individuals continues to improve, while lending to this category continues to expand. In the first half of this year, annual growth in loans to individuals stood at 12.2%, compared with 11.2% in 2025. The largest increase was recorded in housing loans, at 16.6%./TV21/