The mortgage market in Ukraine is developing a rather modest pace. While in neighboring countries the state supports the market and housing loans are becoming more affordable, in our country it seems that no one seems to be hoping for interest rates. Nevertheless, in some cases, a mortgage is simply an indispensable tool for the purchase of housing. Housing loans remain extremely expensive in Ukraine, but if there is no other way out, it is necessary to weigh all the risks and draw up a loan that allows you to turn the dream of your own housing into reality.
Such an expensive mortgage
In many European countries, thanks to the active position of the state, a mortgage is an affordable tool for the purchase of housing. Banks get the opportunity to give cheap loans, and as a result, a mortgage becomes a massive and familiar phenomenon. We have housing loans remain an expensive solution to the housing issue. There are many reasons for this, in particular, one of the problems is the high cost of resources for banks. Due to the fact that the state does not properly affect the mortgage market, banks independently look for funds for issuing mortgage loans, which eventually turn out to be so expensive.
One of the main sources of funds that banks direct to mortgage loans are deposits. Today, these funds are categorically lacking, and because of the situation in the financial market that has developed in connection with the political and economic crisis, loans can soon become even more expensive.
The second serious problem is the difficulty of evaluating risks when issuing mortgage loans. In European countries, everything is extremely simple – the borrower has official work and the corresponding earnings, and the situation in the market is stable, including in the foreign exchange market. In our realities, everything is much more complicated. The national currency is prone to instability, and it is difficult to evaluate the risks of issuing loans, since some of the borrowers have unofficial earnings. In such conditions, new buildings in Kyiv and secondary housing become even less accessible in the mortgage market. To take apartments in Kyiv on credit remains expensive and risky. However, if there is no other way out, customers still have to go on a loan.
Mortgage as a solution to the housing issue
Be that as it may, and customers have to humble themselves with the conditions of the domestic market. Expensive loans still remain in many cases the only chance to solve the housing issue. What awaits the mortgage market in the foreseeable future and whether it is worth issuing a loan for housing?
Many experts of the capital market of the capital are sure that this year to expect a decrease in mortgage rates do not have to. Housing, which is in greatest demand, that is, new buildings in the Kyiv region and the capital itself, continues to rise in price. Mortgage rates for new housing also demonstrate an insignificant, but still growth, and not the fall expected by many borrowers. Buying an apartment on credit remains a great risk, and first of all today are aware of banks that are increasingly willingly issuing mortgage loans. The apartment on credit for long -term loans today is available mainly with bets above 20% per annum, therefore, many borrowers are in no hurry to get into credit bondage.
To date, in Kyiv, 16 banks issue mortgage loans for up to 20 years, while the average amount of the first contribution is about 30%. To take such a loan, given the huge interest rates, means agreeing to monstrous overpayments. Experts advise experts for 20 years only in two cases – if you are ready to pay a loan much earlier than a deadline, or if you have been able to find a very profitable housing price.
Exit from the mortgage labyrinth
Unfortunately, taking a profitable housing loan for 20 years in Ukraine has not yet been possible. Long -term loans become only more expensive – January 2014 showed an increase in rates by 0.1%. Nowadays, the average rate on the secondary market for a mortgage for 20 years is 20.2%, and on the primary – 19.5%.
If you want to purchase housing on credit, then the most wise solution today will still be a mortgage for 1-5 years. A number of large developers today offer relatively profitable loans. So, one of the most attractive complexes in the suburbs of the capital, LCD “Seagull”, offers its own mortgage program, without the need to contact banks. Of course, such loans can not be called long-term loans, in this case it is about loan for up to 3 years, but the interest rate of such a loan from the developer is 18%.
Despite the fact that today many developers offer an installment plan on housing, in fact, the buyer seems to make a more or less profitable loan. Only a few large developers really offer a real installment plan. So, the Seagull residential complex today proposes, despite the crisis situation in the market, the design of installments without interest rates and hidden commissions. Of course, such an installment plan can be issued in the market today for a period of no more than a year. And the amount of the first contribution is usually at least 50%, but this option of acquiring housing can really be called profitable and reasonable.
If you arrange a mortgage for several years, then it is definitely better to purchase only primary housing. Mortgage rates are growing today both in the secondary and primary market, however, housing loans in new buildings remain more affordable. Recent calculations of Kyiv real estate market experts confirm that some of the most profitable housing loans is a mortgage in the primary market for a period of 5 years. Thus, when issuing a loan for a period of 5 years, the rate on the primary market is on average 18.2%, while in the secondary market the rates are 20.7%. When applying for a loan for 10 years, the situation is approximately similar – in the secondary market the rates reach 20.6%, while the market of new buildings offers an average rate of 18.7%.
In a word, experts, in general, advise to resist a long -term mortgage. Buying housing on credit for a period of 20 years is extremely disadvantageous and risky. If the loan remains the only available solution, then you should look for the opportunity to arrange a mortgage for a period of 10 years, and even better – for 5 years. Although the most profitable option on the market is a short -term installment plan, which is offered by large developers. New buildings in Kyiv and the suburbs of the capital today offer lower mortgage rates compared to the secondary market, and housing in new developed residential complexes near Kiev is also a profitable object for investing.