What IRCC is and how it changes your loan payment
How the reference index for variable-rate loans in lei is calculated and what it means for your monthly payment.
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What IRCC is
IRCC stands for Indicele de Referință pentru Creditele Consumatorilor, the reference index for consumer loans. Since May 2019, new variable-rate loans in lei granted to individuals in Romania are tied to this index rather than to ROBOR.
Your variable rate has two parts:
- IRCC, which changes once a quarter and is the same for everyone;
- the bank's margin, set in the contract, which stays fixed for the life of the loan.
If your contract says "IRCC + 2.5%" and IRCC is 5.5%, your rate is 8%.
How it is calculated
IRCC is published by the National Bank of Romania and is calculated as the average of the rates at which banks actually lent to each other over a quarter. Two things follow.
First, the index is based on real transactions, not quotes. Second, because it averages a quarter that has already ended, IRCC reacts with a delay. When market rates rise, your payment rises later. When they fall, it also falls later.
What it means for your payment
One percentage point on the rate weighs more than it looks. On a 350,000 lei loan over 25 years, the monthly payment is about 2,234 lei at 5.9%, 2,451 lei at 6.9% and 2,678 lei at 7.9%. Each percentage point adds more than 200 lei a month.
That is why it's worth checking, before you sign, whether you could carry the payment at a rate two points higher.
What you can do
- Compare offers by margin, not by the first day's rate. The margin is the part that stays with you for the whole loan.
- Look at the APR (DAE), which includes fees.
- If you want predictability, consider a fixed rate for the first years.
In the payment calculator you can enter a fixed rate followed by a variable one and see how the payment changes when the fixed period ends.