This measure will significantly cool the real estate market and, according to the Ministry of Construction, will reduce the demand for new construction by 20%
Photo: Yulia PYKHALOVA
The government has increased the amount of the initial payment for a preferential mortgage: now it will not be 15%, but 20%. This measure will significantly cool the real estate market and, according to the Ministry of Construction, will reduce the demand for new construction by 20%.
“This increase certainly serves the interests of the stability of the banking system and the reliability of the functioning of the banking system in the field of mortgage lending,” commented Konstantin Aprelev, vice-president of the Guild of Realtors of Russia, about the situation for KP. UK. – Increasing the amount of the down payment gives the bank more guarantees that the person will not refuse to make the mortgage payments. Because if the price of an apartment suddenly drops, for example, by 25%, then a person with a down payment of 15% will benefit by refusing to pay more interest for this apartment. You can give it to the bank and say, “Thank you, I’ll buy a cheaper apartment.” Such an acquisition is not profitable for the bank: the apartment has become cheaper. So for the bank, an increase in the down payment is a benefit, but for the borrower it is not. We already have many families who cannot save even for a down payment, and this is an obstacle to buying a home.
Shouldn’t an increase in the down payment be understood as a sign that banks expect prices in the real estate market to fall?
“It’s not a fact,” Aprelev says. – We are simply coming up with standard schemes for assessing banking risks. In Europe and North America, where the real estate market is stable and price fluctuations of 5% are already a occurrence, the down payment is 30% of the cost of housing.
What will certainly happen is that the privileged categories of the population will be less likely to buy a home, since not everyone will be able to save for the down payment, the expert noted.
The state preferential mortgage program is valid until July 1, 2024, the loan under it does not exceed 8% per annum. At the same time, average interest rates on bank mortgage programs are around 14% annually.
Currently there are three preferential programs. Mortgage with state support (up to 8% per year), family mortgage (up to 6%), mortgage for IT specialists (up to 5%). The difference between preferential and market rates for banks is compensated by the State. After the official interest rate increased from 8.5% to 12%, the amounts that the State must pay to banks as part of compensation for low mortgage rates also increased. This could also be one of the reasons to increase the down payment.
LISTEN TOO
Experts reveal whether it makes sense to buy an apartment to rent (more details)
