The average interest rate on Russian mortgage loans is expected to fall to 10% by the end of the year from around 11% currently, CEO of the country’s second biggest lender VTB Bank, Andrei Kostin, said at a meeting with President Vladimir Putin.
"At present, the average mortgage rate amounts to around 11%, but we believe that it should decrease to 10% by the end of the year,” TASS cited Kostin as saying.
VTB said yesterday that it will reduce mortgage rates to 9.5–10.0% for secondary housing and to 9.7–10.0% for new housing.
The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to a correspondent of Vestnik Kavkaza, noted several reasons of decline in mortgage rates. "The first reason is the declining real incomes of the population. To support the construction complex, it is necessary to expand the capacity of the population to purchase housing, and in conditions where salaries are not increased, the key factor in deciding whether to buy housing is the size of the mortgage rate," he pointed out.
"The second point is the reduced rate of financing of the Central Bank last year and the low level of inflation. If inflation is within 4%, then a 10% mortgage loan, which is the most reliable for the bank, gives the bank a 6% benefit. I also do not exclude that it can be part of the preparations for the presidential elections," Alexander Safonov listed two more reasons.
