Interest rate incentive: in 2020 the average mortgage term in Russia reaches almost 16 years

In 2020, the average term of mortgage lending in Russia has grown significantly and amounted to 15.9 years compared to 14.1 years in 2019.

Such data were provided to RT by analysts from the National Bureau of Credit Histories (NBCH).

According to the organization, the longest mortgage repayment period was noted in the Tyumen region (17.3 years), Moscow (16.9 years) and the Krasnodar Territory (16.8 years).

At the same time, the lowest value was recorded in Irkutsk (14.4 years), Chelyabinsk (14.5 years), and Kemerovo (14.8 years) regions.

As experts interviewed by RT explain, it has become more convenient for Russians to get loans for a longer period as a result of the reduction in mortgage rates.

So, at lower percentages, the amount of the monthly payment becomes less burdensome for the family's budget.

“The lower mortgage rate allows you to split the loan over a larger number of years.

So banks and borrowers are trying to adjust the situation to the specific material capabilities of families taking a mortgage, "- Pyotr Pushkaryov, an analyst at TeleTrade Group, explained in a conversation with RT.

According to the analytical center "DOM.RF" and Frank RG, over the past year, market rates on mortgages in Russia have dropped by one percentage point and today hover around 7.85-8.05% per annum.

Under these conditions, banks are currently issuing about 70% of all housing loans.

According to experts, the average duration of housing loans is also increasing due to the action of social programs.

First of all, we are talking about mortgages at a preferential rate of 6.5% per annum.

The program was launched in April 2020 and will run until July 1, 2021.

You can get a loan at a reduced rate when buying apartments in new buildings worth up to 12 million rubles in the Moscow and St. Petersburg agglomerations, as well as up to 6 million rubles in other regions of the country.

According to DOM.RF estimates, within the framework of the initiative, Russian banks have already issued more than 371 thousand loans for almost 1.1 trillion rubles.

“The preferential mortgage has become an incentive for a sharp increase in the volume of housing loans in the country.

Thanks to the favorable terms of the program, Russians were able to choose a loan term convenient for themselves and establish a comfortable level of payments, "Pavel Sigal, First Vice President of the All-Russian Public Organization for Small and Medium-Sized Businesses" Support of Russia ", told RT.

Moreover, the increase in the average loan term is partly due to the fall in bank deposit rates.

Vasily Karpunin, head of the information and analytical content department of BCS World of Investments, shared this opinion with RT.

According to the Central Bank, over the past year, the maximum rate on deposits in the largest banks fell from 5.49 to 4.47% per annum.

“In these conditions, Russians began to look for alternative options for investment, including the purchase of housing.

A lot of investment money has come to the market, which is aimed at renting out real estate and generating income.

In this case, choosing a long term ensures minimal costs and a burden on the investor's budget, ”Karpunin explained.

Credit age

According to the NBKI, most often Russians aged 30-39 take a mortgage on an apartment.

The share of such borrowers accounts for almost half (46.9%) of housing loans issued in the country.

As Artyom Tuzov, executive director of the capital market department at Univer Capital, noted in a conversation with RT, 30-year-old citizens can take out a loan for a longer period with less fear.

Moreover, from the point of view of banks, this category of Russians is the most reliable group of clients.

“After 30 years, Russians, as a rule, already achieve some success in their careers and get stable jobs.

At this age, they already manage to start a family and, as their children are born, they increasingly need to improve their living conditions.

Meanwhile, even with a loan term of more than 20 years, these borrowers will have time to repay the loan before retirement, which makes them the most attractive age group for banks, ”Tuzov explained.

Against the background of the growing demand for mortgages in Russia, the average size of a home loan has also grown at a record.

According to the NBCH, in 2020 the indicator increased by 11.4% - to 2.81 million rubles.

The value has become the maximum for the entire observation period.

Experts explain this dynamics to a large extent by the rise in the cost of housing in the country.

As Pavel Sigal noted, in 2020 the average cost of apartments in new buildings increased by almost 20%, and in the secondary market - by 10-15%.

According to Aleksey Kuznetsov, Head of the EDB Center for Country Analysis, a decrease in the number of erected facilities against the backdrop of rush demand played in favor of the rise in prices.

“In 2020, 1.8% fewer residential buildings were commissioned than a year earlier.

At the same time, the outstripping increase in demand resulted in an increase in the cost of square meters.

However, the economic recovery predicted in 2021 should have a positive effect on the construction industry and the housing market as a whole, "Kuznetsov said.

According to Vasily Karpunin, the completion of the preferential mortgage program should limit further growth in apartment prices.

As the expert explained, now cheap loans encourage Russians to buy real estate more actively, and developers to build more housing.

The discontinuation of subsidized loans in July will weaken market demand, while supply will remain strong.

“As a result, prices will most likely not only stop growing, but will start to gradually decline already in the second half of 2021. Developers will hold promotions in order to quickly realize the built houses and return the funds spent, "Karpunin concluded.