ALEXEY VEDEV: SECURED MORTGAGE IS A FULLY RELIABLE LOAN FOR THE BANK
Alexey Vedev, Researcher, Financial Studies Department of the Gaidar Institute, commented prospects of mortgage rates changes on the air of “Radio 1”.
Alexey Vedev, Candidate of economic sciences thinks that rates on mortgage loans will reduce in Russia.
Alexey Vedev said: "Currently, there is a very high mortgage rate here: mortgage loan of 10% means that a family buys two apartments within 10 years: one for themselves and the other goes to the bank. In other countries, mortgage amounts to 2- 4% and I think that this is fine. Eventually, mortgage will be more affordable in Russia because secured mortgage is a fully reliable loan for the bank and rates are primary defined by risks of loan default. Secondly, according to President’s Executive order, a record housing supply is planned. It has to be sold while, I think, there will be not many people wishing to take mortgage with a 10% annual interest and buy housing".
He added that financial consultants recommend to give up mortgage loans if one requires a loan for the first payment. Besides, funds to cover the loan cost should preferably constitute less than 30% of the monthly wages.
Alexey Vedev said: "Currently, there is a very high mortgage rate here: mortgage loan of 10% means that a family buys two apartments within 10 years: one for themselves and the other goes to the bank. In other countries, mortgage amounts to 2- 4% and I think that this is fine. Eventually, mortgage will be more affordable in Russia because secured mortgage is a fully reliable loan for the bank and rates are primary defined by risks of loan default. Secondly, according to President’s Executive order, a record housing supply is planned. It has to be sold while, I think, there will be not many people wishing to take mortgage with a 10% annual interest and buy housing".
He added that financial consultants recommend to give up mortgage loans if one requires a loan for the first payment. Besides, funds to cover the loan cost should preferably constitute less than 30% of the monthly wages.