In Russia, the number of applications for mortgages on secondary housing with a rate of 1% per annum is growing. Following subsidized mortgages from developers at near-zero rates, banks began to launch similar mortgages in the secondary market, Izvestia was told at the federal company Etazhi.
“The borrower pays a commission from his own funds to the bank for lowering the rate when applying for a mortgage,” said Tatyana Reshetnikova, deputy head of the mortgage department of the federal company Etazhi.
Such a scheme is beneficial only under certain conditions and if you need to reduce payments for the entire period, she added. The expediency of using such a service from the bank must be calculated in each case individually, Reshetnikova added.
“Such programs are beneficial for long-term lending, when the borrower does not plan to use the right to early repayment of the loan. Otherwise, it is more profitable to use standard lending conditions. In addition, such a service involves a significantly larger down payment and is not suitable for those who purchase housing with a minimum of their own funds,” the expert said.
According to her, for example, with the cost of an apartment of 10 million rubles, a down payment of 60% and a loan term of 30 years, the monthly payment will be 41,145 rubles – under standard conditions (12% per annum). The total cost of buying an apartment for the entire 30-year period of using the loan, taking into account insurance and overpayment of interest to the bank, in this case will amount to 21,593,111 rubles. If, under the same conditions, you use the bank’s service to reduce the rate to 1% per annum, the amount of monthly payments will be 28,338 rubles, and the total cost of buying an apartment will be 17,418,573 rubles, she said.
However, with a loan term of 10 years, a regular mortgage turns out to be more profitable: the monthly payment is 57,388 rubles instead of 77,184 rubles under the program with a reduced rate, the expert said.
“The shorter the loan term, the less profitable it is to use the service of lowering the interest rate, since the loan amount itself increases due to the payment of the commission, due to the fact that the borrower spends part of his own funds on paying the commission for lowering the interest rate, and under standard conditions – only for the down payment,” Reshetnikova explained.
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