Wednesday, August 23, 2017

Sverdlovsk region records growth in mortgage rates

The average rate on housing loans in the Urals could reach 13.3 percent per annum in 2013, according to a recent report.

Also, this year, the leading market players have decided to lend on apartments, Mir66 reports.

A rise in mortgage rates was recorded during the last year. The same VTB24 increased from an average of 11.2 percent to 11.89 percent per annum. The Central Bank of the Russian Federation reported that the average rate on the market today is 12.26 percent, a number experts say will only grow with inflation.

Growth rates and cost of housing, though, have not resulted in a decrease in interest from consumers looking to buy on credit. Sergey Kulpin, a Ural branch manager, said that more than 70 percent of mortgages sold are in ready housing and a small part of loans are issued for construction sites. On average, mortgages today are issued for 12 years.

VTB24 is considering lending in a new format, offering lending for apartments. Apartments are subject to non-residential purposes, which makes it problematic to register and pay for utilities, resulting in prices somewhat higher than a normal apartment. The cost is lower, however, per square meter, which has led developers to begin withdrawing these items from the market, Mir66 reports.

Customers can often purchase an apartment, signing a contract with the builder, but for most mortgage customers, banks refuse. Financial institutions are now considering this segment of the market, but only on selected objects, in agreement with the developer.

Interest rates on such loans will be different from standard interest rates, changing after the property goes from registered to bid to becoming property of the client, Kulpin said, according to Mir66.