When it’s about real estate ownership, Ukrainians most often purchase 1-2-room apartments. It is this type of properties that locals most often borrow money for. How does the system of mortgages work in Ukraine?
Mortgages in Ukraine cost 22-24% annually
The reason for such high costs of mortgages lies in the unstable economic situation, where giving loans becomes a high risk business. Thus the shockingly high interest rates.
The maximum repayment period for a home loan is 20 years. Usually borrowers do their best to repay the loan in full within 5-10 years.
To attract borrowers, lenders offer a special introductory rate for the first 1-5 years of the loan. Usually it would be 3-5% lower than the regular interest rate.
It’s hardly surprising that locals are not in a hurry to borrow money from banks and lending institutions, given the ridiculously high interest rates.
In fact, there are fewer people borrowing in 2019 as compared to 2018, Finance.ua reported. At the same time the size of an average home loan increased from 450 to 580 thousand hryvnia (from 17 to 22 thousand US dollars).
Sergey Burlakov, a real estate expert, explained the situation with the home lending in Ukraine:
“During some months of the previous year the share of sales involving mortgages reached 11% of all purchased apartments. However, the mortgage potential is being realized only in the conditions of a stable economy and income of the population. One more condition: The yearly interest rates should be lower than the level of devaluation of hryvnia in the long term, and the level of inflation should be stable and low.”
Did you know that interest rates on home loans in Ukraine are so high? What do you think is going to happen in the long term and when will Ukrainians be able to borrow money to buy a home for a reasonable cost?
Share this article
CommentsКомментарии ( 0 )