Croatian National Bank adopts consumer lending criteria with DSTI caps and a 90% LTV limit effective 1 July 2025

The Croatian National Bank has adopted a Decision on consumer lending criteria following public consultation, introducing macroprudential limits aimed at curbing risks from strong household lending and strengthening household resilience in adverse macroeconomic scenarios. The measures are described as preventative and are expected to primarily affect general-purpose cash loans, with a currently less significant impact on housing lending. Under the Decision, new lending is constrained by a debt service to income (DSTI) cap of 45% for housing loans and 40% for non-housing loans, and a loan to value (LTV) cap of 90% for consumer loans secured by immovable property. Maturity limits are set at 30 years for housing loans and non-housing loans collateralised by immovable property, and 10 years for other non-housing loans. Banks may apply exemptions, allowing 20% of the amount of consumer housing loans and 10% of the amount of other consumer loans to exceed the DSTI caps, and 20% of loans to exceed the LTV cap, based on their own assessment; for housing lending, exemptions are intended to be used mainly for consumers meeting housing needs, including first-home purchases. The restrictions will enter into force on 1 July 2025, reflecting consultation feedback and allowing borrowers already in the credit assessment and home purchase process to complete agreements, while giving in-scope entities time to adjust systems and establish a database for implementation and oversight. The Croatian National Bank will continue monitoring the broader macroprudential framework and may adjust the measures as systemic risks and macrofinancial conditions evolve.