Montenegro’s central bank is preparing broader borrower-based lending measures from 1 January 2027 to address risks from rapid housing-credit growth, rising property prices and household indebtedness. The framework would give banks a more comprehensive way to assess affordability and collateral risk before approving loans, the regulator said.
The planned rules would cover debt-service-to-income ratios, loan-to-value ratios and credit maturities. They would not set an identical limit for every borrower or bar all new loans above a single threshold, according to the central bank.
The central bank’s November macroprudential report showed residential mortgage loans to households rose 20.7% year on year by the end of June 2026. The banking sector remained well capitalised as mortgage lending expanded.
Data for newly issued housing loans in the first half of 2026 showed that 29.9% of loan value had loan-to-value ratios between 80% and 90%, while 3.5% had ratios above 90%.
22.4% of new housing-loan value combined debt service above 40% of income with loan-to-value ratios above 80%. Such loans are more vulnerable to weaker incomes or falling property prices, the regulator said.
The report assessed overall risk as moderate, supported by strong bank capital and low non-performing loans. Rising household indebtedness relative to GDP supported preventive measures before credit quality deteriorated.
For property buyers and developers, the framework makes presales financing, buyer deposits and affordability assumptions more important. Banks will need conservative valuations and careful stress testing of borrower income as they prepare for the planned start date.
