Online mortgages from the National Bank

The new generation of products for the purchase of housing that give pre-approval before the search for housing, is presented in his interview with Capital.gr by the Director of Small and Medium Enterprises Products and Retail Loans of the National Bank, Mr. Christoforos Hatzopoulos.

Interview with Leonidas Stergiou

Greek banks are called upon to adapt to a new environment characterized by high demand for mortgages, especially from new borrowers, when property prices and rents rise, while the income and wealth of the younger generation can not always ensure the best choice that meets her needs.

At the same time, speed, flexibility, quality of service and minimization of bureaucracy are now given requirements of the new generation of banking customers, where only the digital transformation is not enough if it is not accompanied by redesign of the products and the philosophy of the bank.

The Director of Small and Medium Enterprises Products and Retail Loans of the National Bank, Mr. Christoforos Hatzopoulos, in his interview with Capital.gr, presents the trends of the housing and mortgage market, the profile of the new generation of borrowers, the competition, but also their needs . It also raises the issue of minimum own participation in a mortgage, in relation to the extension of leasing for the acquisition of housing, according to the new legal framework.

Adapting to new demographic, economic and institutional data is the only way for banks. In this context, Mr. Hatzopoulos presents the new generation of mortgage loans of the National Bank, which incorporate flexibility and innovation, providing a solution to new needs. Digitization is just the tool.

The redesign and the new philosophy are the change and the innovation that give the competitive advantage to the client of the national: pre-approval of a mortgage loan from the computer within 5 days at most, so that there is time and bargaining power to find the most suitable home.

Also, Mr. Hatzopoulos presents the plans and goals of the National Bank for the financing of households in 2022 and 2023.

How has the mortgage market changed, after the crisis of more than ten years, when the lending taps were closed? Can mortgages again serve as a lever to support construction activity?

Mortgages have always been the backbone of the construction and real estate market. In the 2010s, mortgages fell to a minimum, significantly more than real estate transactions. What does this mean; Most transactions were made with equity, ie with cash rather than loans, the opposite of what was done in the 2000s. This contributed to the reduction of real estate prices. That is, while transactions were made, a much smaller percentage of them were on loan. In the 2000s, 60% of residential properties were purchased with a mortgage, while in the 2010s this percentage fell to 20%.

Competition in mortgages has intensified in the last two years. What are the disbursements in 2020 and 2021 and what are the bank’s estimates for the growth rates of the real estate market in the coming years?

Today, if we look at the demand for mortgages in numbers, in 2020 500 million euros were given, in 2021 890 million euros were given mortgages, while in 2022 1.25 billion euros are expected, with a projected growth rate of over 30% in the coming years. The growth rate of real estate is linked to the growth of the economy, which at this stage leads to an annual increase of 5% of their prices.

How many loans does the National Bank plan to grant in the two years 2022-2023?

The National Bank is historically the major player in the Greek market. Most Greek families acquired their home with a loan from Ethniki. We are already moving very actively in this new era, utilizing all modern means, for the speed of service and meeting the needs of our customer. For 2022 and ΄23 we have planned the granting of our mortgage loans to reach close to 1 billion euros. Very important amounts for the service of households and especially for young couples, but also for the further development of the market.

What is your most innovative service or what do you consider the competitive advantage of the National Bank today in the mortgage market?

The National Bank, as part of its digital transformation program, has significantly reduced the procedures required to obtain a mortgage loan and also reduced the waiting times. For example, the pre-approval time of the mortgage is currently 5 days! It also has a digital procedure for applying for and approving a mortgage. This is currently offered only by Ethniki. And it is a big change in the data so far and a significant advantage for the customer. It gives him confidence to move further, while also saving time. What does all this mean: the interested party can submit the application from his house, “upload” his liquidation and receive the pre-approval without moving. Then, with this fact in his hands, he can proceed to a preliminary agreement, to present the titles (contracts, floor plans) of the property so that the legal and technical inspection can proceed. It is clear that during the search the interested party can also seek advice from a specialized mortgage executive of the bank. In all the stores there is specialized staff, but at the same time an exclusive telephone service for servicing mortgages.

How will the recent legislation that allows natural persons to acquire housing by leasing for reasons other than business, in the sense that the same participation is not required here, affect the mortgage market?

Recently, the possibility of acquiring a house by leasing even by individuals was legislated. It is generally estimated that the housing market will increase over the next three years and mortgages will increase even faster, especially as long as interest rates are still low. Prospective buyers are beginning to have more confidence in the outlook for the economy, and in the case of the housing market, they are manifesting this by turning to mortgages.

What are the characteristics of the average mortgage and the average borrower?

The average mortgage loan is 85 thousand euros with a typical duration of close to 30 years while the age of the borrower ranges from 29 to 44 years. 93% of mortgage borrowers choose an interest rate that is either fixed for the entire duration or for part of the loan term. The mortgages that today’s buyers prefer are those with a long duration and a fixed interest rate. Indicatively, with 2.80% for 10 years and then with a floating interest rate, it is a combination that is preferred by the largest percentage of new buyers.

How is the housing market affected mainly for young families, given that they are required to cover 20% of the home market with their own participation and the financial conditions are difficult?

Now many young families are choosing a mortgage to buy their home. The need for own participation in the amount of at least 20%, is very often the criterion by which they will choose the size and value of the house they will buy. Sometimes the 20% that buyers have to pay with their own money is considered an obstacle to completing the purchase, because the house they want to buy is more expensive than they can actually afford to pay and thus do not have the required same participation. But the 20% that the buyer is required to contribute is a good and balanced guide to the costs he can actually pay and the size of the home he can actually maintain. With the financial conditions of the last decade, many new buyers were led to buy smaller homes, which led to a healthier financial situation and themselves, after taking home measures and this is evidenced by the delays in loan payments for new buyers. and borrowers are zero.