PBZ Eases Repayment of Housing Loans in Swiss Francs

Privredna banka Zagreb (PBZ) announced today that it has prepared a package of measures to ease the repayment of housing loans in Swiss francs, including a reduction of the interest rate by 0.35 percentage points on housing loans in francs starting from November 1, regardless of the client’s status.

PBZ has prepared a package of seven measures for its clients, users of housing loans in švicarskim francima under standard conditions with a variable interest rate, as stated in the bank’s press release. In addition to the reduction of the interest rate by 0.35 percentage points on housing loans in francs from November 1, PBZ also offers its clients the option to convert loans into euros with an additional reduction of the interest rate by 0.20 percentage points. From November 1, the conversion of loans into euros will be available under particularly favorable conditions, and the conversion period is one year, ending on November 1, 2011, according to PBZ. Clients will not have to pay a conversion fee, and they will be offered a fixed, reduced interest rate of 0.20 percentage points for the first two years of loan repayment. For the remaining repayment period, the interest rate for loans in euros will apply, which were approved simultaneously with the loans in francs.

When converting loans, PBZ clients will be able to choose the conversion date, will not need a new property appraisal, and will have the option to combine the extension of the loan repayment period with the conversion. As a third measure, PBZ mentions the arrangement of a grace period for the repayment of the principal, with an interest rate equal to the regular one and a grace period of up to 12 months. There is also an extension of the repayment period to a total of 35 years (without arranging a grace period), with the possibility of partial repayment of the loan from insurance instruments (deposit, fund, life insurance policy).

PBZ has also prepared a special flexible repayment plan that allows for the maintenance of the monthly installment amount in kuna within the limits agreed upon with the client over a certain period, and it is possible to arrange a new method of loan repayment with a repayment plan involving gradual increases in annuities. The seventh measure from PBZ is the possibility of refinancing the loan with a new housing loan in euros, without a fee for processing the application, without a fee for early repayment of the housing loan in francs, and with the recognition of the existing property appraisal. PBZ notes that the problem of the strengthening of the franc against the euro causes difficulties for a large number of people in the wider region, increasing the amounts of monthly annuities converted into local currencies. The exchange rate of the franc on today’s established exchange list of the Croatian National Bank is 5.551910 kuna, so the franc has almost equaled the US dollar, whose average exchange rate is 5.568043 kuna, according to PBZ’s announcement.