KIM-V (Real-Estate Lending Regulation)

What KIM-V actually was

The KIM-V (Kreditinstitute-Immobilienfinanzierungsmaßnahmen-Verordnung — Regulation on Real-Estate Financing Measures by Credit Institutions) was a regulation issued by Austria's Financial Market Authority (FMA) on 20 July 2022 and binding on every Austrian-domiciled credit institution from 1 August 2022. It gave concrete form to the macroprudential powers in section 23h of the Banking Act (BWG), and was a direct response to years of warnings from Austria's Financial Market Stability Board (FMSG) about an overheating residential property market and disproportionate growth in mortgage lending.

The backdrop: average loan-to-value ratios on new mortgages had climbed from around 80% in 2015 to over 90% by 2021, alongside increasingly long 30- to 40-year tenors and sharply rising property prices — between 2010 and 2022, owner-occupied apartment prices in Austria nearly doubled. The regulation was intended to cap systemic risks from household over-indebtedness and to shield banks from rising default rates.

KIM-V in its original form expired on 30 June 2025. Its core standards have since been carried forward through supervisory recommendations ("minimum lending standards") and section 23h BWG. If the market overheats again, the FMA can reactivate the regulation at any time.

The three core limits

KIM-V set three binding ceilings on private residential mortgages:

• Loan-to-value (LTV): a maximum of 90% of the property's market value. The equity contribution must therefore be at least 10%, and in practice closer to 20% once acquisition costs are factored in.
• Debt-service-to-income (DSTI): at most 40% of household net income may go to ongoing mortgage servicing.
• Maximum tenor: 35 years.

Banks were allowed to write up to 20% of new business each quarter outside these limits (the "exception quota"), and primary-residence loans, refurbishment loans under €50,000 and refinancing transactions enjoyed additional easings.

What borrowers were paying in 2024

A couple in Linz with combined net income of €4,800 want to buy a €400,000 apartment in 2024 (plus around €40,000 in acquisition costs). Under KIM-V: maximum loan €360,000 (90% of €400,000), minimum equity €80,000. The monthly instalment at 4% over 30 years works out at about €1,720 — 35.8% of net income, comfortably below the 40% DSTI ceiling. The loan would have been approved under KIM-V. Before August 2022, many banks would have written 100% financings with a 50% DSTI ratio.

Market impact and criticism

From Q4 2022 onward, KIM-V triggered a sharp contraction in new residential mortgage volumes. According to OeNB data, volumes were down roughly 40% year-on-year in the first half of 2023. Banks reported that the equity requirement was pushing out young first-time buyers without family support in particular — a story that piled political pressure on the FMA and ultimately contributed to the regulation lapsing in 2025.

A historical note: KIM-V was Austria's first comprehensive macroprudential measure designed along international lines (BCBS, ESRB). Scandinavian and Dutch supervisors had introduced similar caps well before 2015.

Around KIM-V, the same vocabulary keeps coming up: LTV, DSTI, DTI, section 23h BWG, the FMSG, macroprudential supervision, residential mortgage, exception quota, refinancing and the OeNB.

Common questions

Did KIM-V cover investment properties as well? Yes, it applied to all residential mortgages to private households, including buy-to-let apartments and investment apartments. Commercial property financings via corporate vehicles fell outside its scope.

What has changed since it lapsed on 1 July 2025? The formal regulation no longer applies, but the FMA has issued recommendations with essentially the same thresholds. Banks have continued to follow those standards, partly because they have already been baked into internal risk models.

Who would decide on a reactivation? The FMA, in consultation with the FMSG and the OeNB. The trigger would be a renewed rise in the share of high-LTV lending or a marked recovery in property prices coinciding with looser bank practices.