Banks are unlikely to be affected by tougher EU rules for home loans as Maltese regulations had been tightened early this year.

The European Commission is proposing greater scrutiny on people taking out home loans to make sure they can repay them.

Banks and financial institutions will have to be clearer on the information they give to clients before lending them money.

The rules also introduce a new cooling-off concept, where clients will be given the chance to change their mind within a set period of time.

Regulations that came into force in Malta last January were based on the same parameters of the new EU home loan legislation, according to Bank of Valletta, the largest retail bank.

A bank spokesman said the January rules listed the minimum competence requirements of creditors and credit intermediaries and put greater emphasis on the conduct of banks when granting credit to consumers.

The regulations also govern home loan advertising and eliminate the early repayment fee condition of a home loan not covered by a fixed interest rate contract, making them more portable.

“Legislation has already been upgraded keeping in mind EU regulations that are in the pipeline.

“Our conservative approach to lending based on the principles of affordability and appropriate leverage ensures we follow best practice and good lending principles,” the spokesman said.

The EU rules have still to be adopted by the European Parliament before endorsement by the member states.

A spokesman for HSBC, the second largest retail bank, said it would be evaluating the proposals and their implications in due course.

“The bank will be actively participating in any consultation process related to such proposals,” he said.

HSBC always ensured it was fully compliant with domestic and EU rules governing banking and financial services in the interests of its customers, the spokesman added.