Romanians Reject Euro Loans After Hungary Disaster: Mortgages

Romania, using record-low interest rates to rebuild a housing market devastated by the economic crisis, is forcing homebuyers like Vlad Popescu to abandon cheap euro-denominated mortgages in the name of financial stability.

In October, the government changed the terms of a four-year-old program for euro loans to only cover credit in the Romanian currency, the leu. In the following months, banks, led by Erste Group Bank AG’s Banca Comerciala Romana SA and BRD-Groupe Societe Generale SA, accelerated leu mortgage lending. It grew at a record annual pace of 90 percent in December.