Zelensky says promised mortgage offers with 10% rate already in place

Ukrainians are now able to buy new homes with more affordable mortgage deals with loan rates of 10% per annum, Ukrainian President Volodymyr Zelensky has said.

Previous mortgage rate have long been unaffordable to many Ukrainian families, the President's press service quoted Zelensky as saying.

"We do have problems, and I'm aware of that. They are related to the national bank's key policy rate, as well as inflation. But all these difficulties are technical. They will all be mitigated over time. Now the most important thing is that there is already a signal and examples: people can and do take mortgage loans at 10%," the president said, adding that this is "only the beginning".

Mortgage rate of 10%

Zelensky says a mortgage rate of 10% or even lower is one of the main objectives his team is working toward.

"Now, there are agreements, and they are already being implemented. Now the mortgage rate is reduced. In some banks the mortgage is 10%. In general, the main task was: if the mortgage rate is 10%, we will really help people who can afford to buy a home," Zelensky said.

Affordable loans program

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"Both state-owned and commercial banks are involved in the program. Most of them launched a pilot project on July 1," the president's press service wrote.

Affordable mortgage is becoming a "totally commercial" product, in which banks are interested, the report reads, adding that demand and the number of applications have been on the rise.

It is noted that each bank has developed its own program and conditions, offering affordable mortgage loans, such as the overall sum, the down payment, the preferential rate term.

Main condition for mortgage applicants

"The only standard condition is that borrowers must demonstrate to the bank that their family or household has income, which will allow servicing this loan," the report reads.

Affordable mortgage – background

• The Ministry of Finance said certain legislative restrictions were hindering the launch of mortgage at 10%.
• On July 22, 2020, Prime Minister Denys Shmyhal said he considered it quite realistic to reduce the mortgage rate to 10%.
• On June 23, 2020, Shmyhal noted that the Cabinet's target was to reduce mortgage rate to 7%, or even 5%.
• On June 2, 2020, the national bank announced that the launch of a mortgage at 10% per annum would be possible after quarantine restrictions are lifted.
• This also requires from banks to amend their interest rate policy and from parliament – to pass a number of legislative amendments.