Housing loan rate cap expires on 31 May

The statutory maximum interest rate on new variable-rate housing loans, set at five per cent for the period from 1 January 2026 to 31 May 2026, expires on the final day of this month, according to a statement the National Bank of Serbia issued at the end of January as part of the implementation of amendments to the Law on the Protection of Financial Service Users. From 1 June a new mechanism comes into force, tying the maximum permitted rate to the weighted average market rate plus one fifth.

The maths works by taking, as the base, the weighted average rate on all newly approved housing loans to households in the previous 12 months, which the NBS publishes twice a year. Based on the latest data, the weighted rate for the period May 2025 to April 2026 stands at 5.1 per cent, meaning that from 1 June the new maximum rate would be 6.12 per cent. This mechanism stays in force until 31 December 2027, when the permanent regulatory regime kicks in.

Who is losing, who is gaining

The clearest losers are users who delayed signing a loan until June in the hope that conditions would stay unchanged. In May 2026 Banca Intesa, OTP Bank, AIK Banka and Komercijalna Banka recorded a 38 per cent rise in new housing loan applications compared with the same month last year, according to figures from the Association of Serbian Banks published on 22 May. Customers who manage to finalise a contract by 31 May lock in the nominal maximum rate of 5 per cent, while those who sign from 1 June can expect terms in line with the weighted average plus a bank margin of up to 1.02 percentage points.

For their part, banks are dealing with pressure on working capital from the concentrated execution in May. AIK Banka’s retail banking director Vladimir Krulj told the portal Biznis.rs that the technical processing of applications in the final weeks of May has been “an operational burden beyond standard capacity”, but that banks will not turn away customers with correct documentation.

What this means for the monthly instalment

For an average housing loan of 12.5 million dinars (about 106,500 euros at the NBS mid-rate) with a 25-year repayment term, the difference between a rate of 5 per cent and 6.12 per cent shifts the monthly instalment from 73,100 to 81,300 dinars, around 8,200 dinars (about 70 euros) more per month. Over the full credit sum, additional interest costs over the 25-year term come to 2.46 million dinars (about 20,950 euros).

What the consumer associations say

Efektiva, the largest financial-services consumer association in Serbia, said in a statement on 18 May that the mechanism taking effect from June was “less favourable for the user than the previous fixed cap”, but at the same time better than full market deregulation, since it preserves regulatory control over the maximum deviation. Efektiva director Dejan Gavrilovic told the daily Politika that customers already holding a fixed-rate loan should consider refinancing only if the rate difference exceeds 0.8 percentage points, the threshold above which switching costs pay off.

Professor Goran Pitic of the Belgrade Faculty of Economics told the same paper that the new mechanism was “a step toward market logic”, but that in practice it means an increase in financing costs for the average flat purchase in Belgrade, at around 2,000 euros per square metre, of 60 to 70 euros per month. On macro indicators, the NBS noted in its March Financial Stability Report that a shift to the market formula could, in its first six months, slow new household housing-loan growth by 15 to 22 per cent, with a parallel cooling effect of similar size on transaction activity in the property market.

On the other side, the fixed interest rate, which in the current bank offer ranges from 5.2 to 5.9 per cent for a period of 5 to 10 years, sits outside the regulatory cap and can serve as an alternative for customers who want a predictable monthly obligation. In its May campaign, Banca Intesa is offering a 5.3 per cent fixed rate over seven years with the option to refinance at the variable rate for the remaining term. The next publication of the weighted average rate, which will affect the maximum in the second half of the year, is scheduled for 31 October 2026.