The Governing Council of the Bulgarian National Bank (BNB) has adopted requirements with respect to the lending standards for originating and renegotiating new loans, secured by residential real estate (RRE) located in the Republic of Bulgaria. The requirements shall be applied on individual and consolidated basis. The ratio between the loan amount and the value of the immovable property at origination shall not exceed 85%; the ratio between the current debt service amount and the monthly disposable income of the debtor at origination shall not exceed 50%; and the maximum maturity shall not exceed 30 years. The requirements enter into force on 1 October 2024. The banks could originate or renegotiate RRE loans with parameters that deviate from the introduced requirements with a total approved or renegotiated volume during the current quarter of up to 5% of the total gross amount of the new or renegotiated RRE loans during the preceding quarter. The BNB’s “periodic analysis reveals that lending activity in the RRE segment remains elevated and lending growth accelerated further in the second quarter of 2024. The assessment shows that some indicators (credit growth, indebtedness, house price growth and overvaluation, average loan size, etc.) have shifted to a higher risk category, which signals potential build-up of medium-term risks for the banking system. While no worsening of the weighted-average lending standards is observed, the identified areas of potential vulnerabilities, related to the presence of loans within the higher intervals of the lending standards’ indicators, are still present. Thus, the activated requirements are of preventive nature and are targeted to preserve the resilience of the banking system in the context of increasing medium-term cyclical risks. The requirements support safeguarding the stability of the banking system by complementing the existing capital buffers, set by the BNB at levels, which are among the highest in Europe. The requirements are not restrictive to the provision of credit, but follow the BNB highly conservative supervisory approach and the overall practice for the introduction of such macroprudential measures by EU countries.” Note that the gross mortgage loan portfolio increased by 23.4% YoY as of end of July to BGN 24.9bn (12.7% of GDPe) as the new mortgage loans increased by 35.7% YoY to BGN 5.6bn for the first 7 months of the year. At the same time interest rates stay near the historical minimum at 2.53% for BGN-originated loans in July.