BUYING A ONE ROOM APARTMENT IN KYIV: "new buildings" WILL BECOME MORE AFFORDABLE IN THE MORTGAGE

It is expected that in 2020 to buy an apartment in Kyiv "new buildings" (from one-room and more) will be easier due to lower mortgage rates. The National Bank states that this year you can expect a mortgage at 14-15%. According to experts, this requires comprehensive solutions, which include, first, protection of creditors' rights and simplification of financial requirements reserved by financial institutions.

January does not yet adjust to the optimism shown by NBU. Despite the strengthening of the hryvnia, the mortgage is still rather expensive. Today, the most acceptable option is 17-18%. But even to receive such an offer you need to meet a number of conditions from the bank. The average figures range from 18% (financing of certain facilities by state banks) to 25% (the bank covers a part of the amount for the housing purchase) (about 10-15% of the total cost).

As it’s been said before, bank requirements complicate reception of the mortgage. In a country where a significant number of citizens are employed informally, a mortgage loan requires a high OFFICIAL income. For example, to receive UAH 500,000–1,000,000 for 5–7 years, you need to have an official income of at least UAH 20,000–25,000 per person, ie, citizens who are married need that the spouses have the same income. Sometimes the bank counts the income not only on adult solvent family members, but also on children, which gives rise to the amount of up to 100,000 hryvnias of official monthly income. Therefore, to issue a mortgage on such terms and buy a one-room apartment in Kyiv ("new building" or "secondary") is almost impossible.

It has long been known about the pitfalls of mortgages in the form of hidden payments. These include insurance (health and life of the borrower, the property itself) for the entire term of the loan and a one-time fee. You also need to pay real estate appraisal at your own expense, and the appraisal has to be done only by the specialist, who will be recommended by the financial institution.

Given these reasons, we declare that the domestic mortgage market does not meet expectations. Even an optimistic forecast from the National Bank is unlikely to have a strong impact on the situation. According to experts, a mortgage of at least 10% can revive the interest of the general public