General information – Mortgage loan

MORTGAGE LOAN (cash loan secured by mortgage) – General information

Information about the credit institution (the Bank)


Name of the credit institution	HIPOTEKARNA BANKA AD
Adress	Podgorica, Bul. Josipa Broza Tita 67
Registration number / Tax Identification Number (TIN)	02085020
Phone number	19905; +382 20 219905
INFO e-mail:	hipotekarna@hb.co.me
Fax number	+382 77 700071
INFO web:	www.hb.co.me

Main features


Loan users (borrowers)	Individual (consumer), a resident citizen of Montenegro with permanent residence in Montenegro, and a non-resident who meets the creditworthiness requirements.
Purpose of the loan	• Purchase of apartments and houses (primary residence or • Investment property); • Refinancing of existing housing loans; • Renovation and construction.
Currency	The loan is granted in EUR.
Loan amount	The maximum loan amount is aligned with your creditworthiness and the value of the agreed purchase price of the real estate being financed.
Type and level of interest rate (annual)	Fixed interest rate: · from 4.99% per annum to 7.50% per annum The final interest rate within the stated range primarily depends on the transfer of your salary to an account with the Bank as the main criterion for obtaining a more favourable interest rate, as well as other parameters used to determine creditworthiness. Within the housing loan offer, the Bank applies only a fixed interest rate. This interest rate remains unchanged throughout the entire repayment period and provides you with full predictability and security. Unlike a variable interest rate, which changes during the repayment period depending on movements in market reference rates, with a fixed interest rate your monthly obligation will be identical from the first to the last instalment, regardless of economic trends, inflation, or changes in benchmark interest rates on the market. The Bank does not offer a variable (floating) interest rate or a combined interest rate.
Interim interest	Interim interest is the interest calculated on the loan amount from the date the loan is disbursed until the start of repayment of instalments, at the regular contracted nominal interest rate. Interim interest is calculated based on the actual number of days in the specific month in which the loan is disbursed. For example, if the loan is disbursed on 10 June, interim interest is paid for 20 days.
Interest calculation method	Interest is calculated using the conforming method, based on the actual number of days in the month.
Repayment period	Maximum repayment period for residents: 20 years; • Maximum repayment period for non-residents: 10 years; The final maturity date of the last loan instalment cannot exceed the Consumer’s age of 65 years.
Loan processing fee	No fee.
Collateral / Security instruments	• Mortgage (lien) on the property being financed or on another suitable property, provided that it meets the Bank’s internal criteria and applicable legal regulations; • Administrative salary assignment of the Consumer (if applicable); • Promissory notes of the Consumer; • Property insurance policy against fire and other basic risks, valid until the end of the loan repayment period, assigned in favour of the Bank; • Life insurance policy of the Consumer, valid until the end of the loan repayment period, assigned in favour of the Bank, whereby you have the right to choose the level of coverage in the range of 40%–100% of the loan amount; it may be required as an additional condition depending on the risk assessment results; The Bank reserves the right to request additional collateral instruments, depending on the Consumer’s creditworthiness. The Bank does not accept collateral instruments located in a member state or a third country. One of the conditions for obtaining a housing loan is also the provision of a down payment in the amount of 20% of the property purchase price.
Additional services	The Consumer who ensures that all personal income—salary and allowances—is regularly received through an account with the Bank, or is in the process of transferring regular income to that account, is entitled to a more favourable interest rate. The Bank does not require opening a new account solely for the purpose of loan approval and use, if the Consumer already has an appropriate account with the Bank. Along with the mortgage on the property, it is mandatory to conclude a property insurance policy against fire and basic risks. Collateral for the loan may also include life insurance policies (the Consumer may choose the coverage level in the range of 40%–100% of the loan amount). Insurance policies are concluded with an insurer acceptable to the Bank and assigned in favour of the Bank. The Consumer has the right to conclude the policy with an insurer of their own choice, provided that the insurer is acceptable to the Bank based on objective criteria of financial stability and creditworthiness, and that the policy offers a level of coverage that meets the Bank’s requirements. The Consumer is obliged to ensure insurance policies for the entire agreed loan repayment period.
Early repayment of the loan	The Consumer has the right at any time to make early partial or full repayment of the loan. No fee is charged for early partial or full repayment of the loan in accordance with legal regulations. For early repayment, the Consumer must submit a written request. Upon receipt of the request for early repayment of the loan, the Bank is obliged, without delay, to provide the Consumer, on paper or another durable medium, with the information necessary for making a decision on early repayment of the loan.
Loan repayment	The loan is repaid in monthly instalments due on the 1st of each month. An instalment is a fixed amount paid by the Consumer and consists of a portion of principal and interest, whereby during the repayment period the share of principal in the instalment increases over time, while the share of interest decreases.
Right of withdrawal from the Loan Agreement	During a period of 14 days from the date of concluding the loan agreement, you have the right to withdraw from and unilaterally terminate the loan agreement. The right of withdrawal and unilateral termination of the loan agreement may be exercised without stating any reason, by submitting a personally signed statement of termination of the loan agreement to the Bank’s address or to the nearest branch office, in written form, no later than 14 days from the date of concluding the loan agreement. If you intend to unilaterally terminate the loan agreement, you are obliged to: before the expiry of the 14-day period from the date of concluding the loan agreement, notify the Bank of the termination, with the obligation to pay the utilised principal amount together with the corresponding interest in accordance with the loan agreement, without delay, and no later than 30 days from the date of sending the termination notice, pay to the Bank the principal and accrued interest, calculated at the agreed interest rate, from the date of disbursement of funds under the loan agreement until the date of final repayment.
Possible additional costs not included in the total cost of the loan	Costs of notary services for drafting the mortgage statement and the purchase and sale agreement, as well as public certification of supporting additional documentation if public certification is required; costs of transferring ownership rights to real estate; payment transaction fees charged for processing the transfer of funds from the loan user’s account to the seller’s account; costs of revaluation of the property subject to mortgage if the revaluation is carried out during the term of the agreement; as well as fees that the Consumer is obliged to pay due to non-fulfilment of obligations under the loan agreement.

REPRESENTATIVE EXAMPLE

(costs included in the calculation)


Total loan amount	EUR 120.000
Nominal interest rate (NIR) (annual) – fixed	4,99%
Effective interest rate (EIR) (annual)	5,18%
Repayment period/number of instalments:	240
Monthly instalment:	EUR 783,97
Amount of interim interest*	EUR 497,32
Promissory note cost	EUR 6,00
Credit Registry (RKR) inquiry cost	EUR 3,00
Property valuation cost	EUR 100,00
Property insurance policy cost***	EUR 225,27
Life insurance policy cost***	EUR 1.144,50
Land registry extract (property ownership certificate) cost	EUR 5,00
Cadastral registration fee	EUR 65,00
Account maintenance cost for the entire loan repayment period**	EUR 288,00
Total cost of the loan for consumers	EUR 70.511,49
Total amount payable by the Consumer	EUR 190.511,49

*The calculation of the EIR (Effective Interest Rate) in the representative example is shown under the assumption that the loan is disbursed on 1 March and that interim interest is paid until 31 March.

**The account maintenance fee included in this representative example is shown according to the Bank’s fee tariff valid on the date of preparation of the representative example, assuming that an account is required for the operational repayment of the loan. The Bank may change the account maintenance fee following previously published amendments, in accordance with the provisions of the Law on Payment Transactions.

***The cost of the property insurance policy may vary depending on the size of the property, etc., whereby the calculation in the representative example is based on an assumed residential area of 50 m². Likewise, the life insurance cost depends on age, gender, and the Consumer’s general health condition, whereby the calculation in the representative example is based on an assumed entry age of 33 years, female gender.


Possible consequences of non-compliance with obligations under the housing loan agreement	In case of late payment of an instalment, the Consumer pays default interest, which accrues from the due date until the date of payment, at a rate equal to the contracted interest rate increased by 50%. In the event of non-payment/late payment of an instalment, the Bank may also block all your accounts and, without prior notice, collect its claim with priority from the Consumer’s funds held with the Bank at the moment of default, as well as terminate the loan agreement in writing, declare all loan obligations immediately due in full, and activate/realise the available collateral defined in the loan agreement, whereby the Bank has the right to choose the order of activation of collateral instruments based on its own assessment. Before initiating enforcement proceedings or activating the mortgage, the Bank will carry out the following steps: If you fail to meet your obligations within the agreed deadline, the Bank will send you a written warning and a notice of its intention to terminate the agreement, granting you an additional period to settle the debt; If the debt is not settled within the given period, the Bank will deliver a notice of termination of the agreement. By this act, the entire remaining debt together with interest becomes immediately due; Only after issuing the notice of termination may the Bank initiate enforcement proceedings through a public enforcement officer or start an out-of-court sale of the real estate. In the final instance, a possible consequence of irregular repayment of your obligations may be the loss of your real estate. Where applicable, prior to terminating the loan agreement and declaring the claim fully due, as well as initiating enforcement proceedings, the Bank will, taking into account the specific circumstances of the Consumer causing possible payment difficulties—such as loss of employment, significant reduction of income, serious illness or injury resulting in reduced working capacity, and other serious family circumstances beyond the Consumer’s control, as well as reasonable minimum living expenses—assess whether the Consumer meets the conditions for granting repayment relief measures in accordance with applicable regulations. If the Bank determines that the Consumer does not meet the legal criteria for relief, or that the circumstances do not significantly affect repayment, or that repayment is not sustainable even with relief measures, or that such measures would jeopardise the Bank’s priority of repayment over other creditors, or if no agreement is reached within the prescribed deadlines, or if the Consumer does not accept the proposed measures, the Bank will declare the loan fully due and activate the agreed collateral instruments.

Possible consequences of non-compliance with obligations under the housing loan agreement

In case of late payment of an instalment, the Consumer pays default interest, which accrues from the due date until the date of payment, at a rate equal to the contracted interest rate increased by 50%. In the event of non-payment/late payment of an instalment, the Bank may also block all your accounts and, without prior notice, collect its claim with priority from the Consumer’s funds held with the Bank at the moment of default, as well as terminate the loan agreement in writing, declare all loan obligations immediately due in full, and activate/realise the available collateral defined in the loan agreement, whereby the Bank has the right to choose the order of activation of collateral instruments based on its own assessment. Before initiating enforcement proceedings or activating the mortgage, the Bank will carry out the following steps: If you fail to meet your obligations within the agreed deadline, the Bank will send you a written warning and a notice of its intention to terminate the agreement, granting you an additional period to settle the debt; If the debt is not settled within the given period, the Bank will deliver a notice of termination of the agreement. By this act, the entire remaining debt together with interest becomes immediately due; Only after issuing the notice of termination may the Bank initiate enforcement proceedings through a public enforcement officer or start an out-of-court sale of the real estate. In the final instance, a possible consequence of irregular repayment of your obligations may be the loss of your real estate. Where applicable, prior to terminating the loan agreement and declaring the claim fully due, as well as initiating enforcement proceedings, the Bank will, taking into account the specific circumstances of the Consumer causing possible payment difficulties—such as loss of employment, significant reduction of income, serious illness or injury resulting in reduced working capacity, and other serious family circumstances beyond the Consumer’s control, as well as reasonable minimum living expenses—assess whether the Consumer meets the conditions for granting repayment relief measures in accordance with applicable regulations. If the Bank determines that the Consumer does not meet the legal criteria for relief, or that the circumstances do not significantly affect repayment, or that repayment is not sustainable even with relief measures, or that such measures would jeopardise the Bank’s priority of repayment over other creditors, or if no agreement is reached within the prescribed deadlines, or if the Consumer does not accept the proposed measures, the Bank will declare the loan fully due and activate the agreed collateral instruments.

Other information


Method of submitting complaints	Written complaints may be submitted in one of the following ways: • To the Bank’s Complaints Management Function, at the Bank’s head office address – Bul. Josipa Broza Tita No. 67, Podgorica, or to the e-mail address: prigovor@hb.co.me , or by phone at 19905 (+382 20 2 19905). • Information on the complaint submission procedure at the Bank can be found on the website: https://www.hipotekarnabanka.com/pohvale-i-prigovori , as well as in any branch of the Creditor. • The deadline for deciding on a complaint is eight days from the date of submission of the complaint. • If we do not resolve your complaint internally in your favour, you may also contact the Committee for Out-of-Court Resolution of Consumer Disputes at the Chamber of Commerce of Montenegro, at the address: Novaka Miloševa 29/II, Podgorica 81000.
The competent supervisory authority for credit institutions	Central Bank of Montenegro (www.cbcg.me).

Method of submitting complaints

Written complaints may be submitted in one of the following ways: • To the Bank’s Complaints Management Function, at the Bank’s head office address – Bul. Josipa Broza Tita No. 67, Podgorica, or to the e-mail address: prigovor@hb.co.me , or by phone at 19905 (+382 20 2 19905). • Information on the complaint submission procedure at the Bank can be found on the website: https://www.hipotekarnabanka.com/pohvale-i-prigovori , as well as in any branch of the Creditor. • The deadline for deciding on a complaint is eight days from the date of submission of the complaint. • If we do not resolve your complaint internally in your favour, you may also contact the Committee for Out-of-Court Resolution of Consumer Disputes at the Chamber of Commerce of Montenegro, at the address: Novaka Miloševa 29/II, Podgorica 81000.

The competent supervisory authority for credit institutions

Central Bank of Montenegro (www.cbcg.me).