Property dream turns to nightmare for Eastern Europeans with Swiss franc loans
- 9 years ago
An epidemic of ruinously high mortgage payments and negative equity is afflicting Central and Eastern Europe.
People who bought into the dream of owning property in former communist states such as Romania are finding the price is now too high.
To get lower interest rates people like Daniela Gornea and her husband took out mortgages in Swiss francs rather than local currencies, but the franc has shot up in value leaving them crushed by debt.
The Gorneas have a 65,000 euros loan in Swiss francs for a 72 square metres three-room apartment in a residential area in south Bucharest.
She said: “I think I’m about to lose this house. I don’t have any other option as 740 Swiss francs is 3,700 or 3,800 Romanian lei out of our total monthly income of four thousand lei. I can’t make any plans so it’s clear to me that I’ll lose the house.”
Many borrowers now owe more on their homes than they are worth and would suffer significant losses if they sell as property prices have fallen since t
People who bought into the dream of owning property in former communist states such as Romania are finding the price is now too high.
To get lower interest rates people like Daniela Gornea and her husband took out mortgages in Swiss francs rather than local currencies, but the franc has shot up in value leaving them crushed by debt.
The Gorneas have a 65,000 euros loan in Swiss francs for a 72 square metres three-room apartment in a residential area in south Bucharest.
She said: “I think I’m about to lose this house. I don’t have any other option as 740 Swiss francs is 3,700 or 3,800 Romanian lei out of our total monthly income of four thousand lei. I can’t make any plans so it’s clear to me that I’ll lose the house.”
Many borrowers now owe more on their homes than they are worth and would suffer significant losses if they sell as property prices have fallen since t