Why interest rates change over time and what we can do to protect ourselves
Automatically translated summary. The full text is available in Romanian.
An informative note prepared under the National Financial Education Campaign, implemented by the National Bank of Moldova and Expert-Grup, explains what interest rates are, why they change and how borrowers and savers in the Republic of Moldova can prepare for changes, using the “Prima Casă” mortgage programme as a case study.
Interest rates may be fixed or floating. The main driver is the National Bank of Moldova base rate, which depends on inflation, but lenders also price in default risk: credit history, debt-to-income ratio, job stability and income, loan term and collateral. Most loans in Moldova carry floating rates.
Under “Prima Casă”, launched in March 2018, the rate comprises a reference rate (4.38% in early 2024), a bank margin of up to 3% and a guarantee fee of up to 0.5% (0.25%), revised every six months. In the example, a MDL 800,000 loan over 20 years fell from 10.87% (monthly payment MDL 8,186) to 7.63% (MDL 6,508) in 2024. The National Bank only calculates and publishes the reference rate. Accepting volatility supports realistic expectations, better planning and resilience, without abandoning prudence.
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