In debt for life: in Russia they proposed launching a mortgage for young people for up to 50 years

Despite the gradual reduction of the key rate, market mortgages are not available to young people, said TASS Rustam Azizov. In his opinion, it would be advisable to launch a separate preferential program for a period of up to 50 years for young specialists. The expert believes that increasing the term of mortgage lending is applicable in the context of preferential programs, for example, within the framework of youth mortgages. At the beginning of their professional journey, it is difficult for young people to plan the purchase of real estate if they do not fall under the current benefits.

Now there are many different initiatives that promise to make housing more affordable, but most of them do not explain who will pay for this accessibility, Mikhail Khorkov, head of the analytics committee of the Russian Guild of Managers and Developers, told Tsian.Journal.

If you reduce the monthly mortgage payment by extending the mortgage payment to 50 years, it will not be the affordability that will increase, but the buyers’ expenses for servicing the debt, the expert emphasized. Affordability depends on housing prices and the income level of the potential buyer, and the cost of housing depends on the costs of the developer, the level of competition and the volume of supply in the market. Mikhail Khorkov added that there are almost no proposals from business and deputies on how to build more and inexpensively. Everyone is striving to increase accessibility through the distribution of soft loans and increased budget spending. But the experience of previous years has shown that this does not lead to real housing affordability.

Mortgage programs for a period of 50 years are justified only if the rate on them does not exceed 3%, mortgage market expert Sergei Gordeiko previously told TASS. The longer the loan term, the greater the payment amount the borrower will receive. This is how the annuity payment formula works, in which loan payments do not change from month to month — the effect will only be at a rate of 1-3%.

Now in Russia the maximum mortgage term is 30 years. According to the Central Bank, the average mortgage term is 27 years.

source: CYANOGEN