After an intensive discussion with Finance Minister Magnus Brunner (ÖVP), the domestic banks presented an extensive package of measures. “We will support those who have problems financing their own four walls,” Willi Cernko, chairman of the banking and insurance division of the Austrian Chamber of Commerce, emphasized on Wednesday. For variable loans, no reminder costs and default interest will be charged in the coming period. In individual cases, postponement or extension of the deadlines is possible.
In Austria, more than half of real estate loans recently had a variable interest rate – a high value in international comparison.
Banks are raising interest rates, borrower repayment rates are rising
For many consumers, these loans are becoming more and more of a problem, as the banks are also raising their interest rates in response to the European Central Bank (ECB) interest rate hikes, and redemption rates are rising as a result. He understands the problem and promises to the entire industry “that we will behave really customer-oriented,” says Cernko.
Measures are initially valid for one year
And added: “Should there be problems with the financing of owner-occupied housing and interest on arrears and reminder fees arise, the Austrian banks will waive it. This means substantial support for floating rate borrowers,” notes Willi Cernko. This measure will initially apply for one year.
Initiative to support home ownership
In the context of the re-evaluation of the KIM regulation (regulation on the financing of real estate of credit institutions), the Austrian banks also plan to launch a “homeownership initiative”. The banks jointly intend to make a substantial one-off amount (up to a three-digit amount in one million euros) available. Young families in particular should be promoted and supported from this pot for owner-occupied homes with temporary interest subsidies. The details are currently being worked out by a group of experts.
The platform aims to increase transparency in the field of savings interest
According to Finance Minister Magnus Brunner (ÖVP), transparency about savings interest should also be increased. For this purpose, a platform is installed at the National Bank (OeNB) that bundles and publishes the conditions of the money houses. “This means that savers can easily get an overview of the offer of the various banks at any time.”
An intense discussion had recently erupted in this country about the rising interest rate surpluses of the banks and the widening gap between interest rates on loans and savings rates. The FPÖ called for a tax on excess profits based on the Italo model, the SPÖ pushed for intervention in the market and advocated a minimum interest rate on savings deposits. The debate then prompted the Ministry of Social Affairs, which instructed the Association for Consumer Information (VKI) to file a class action lawsuit against the banking sector.
Brunner rejects the special tax
Brunner has already rejected the special tax, a position he reiterated on Wednesday. There will also be no interest rate ceiling, which is not possible under antitrust law and would “lead to massive disruptions in the financial markets,” the politician argued.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
