Mortgage Lending Exceeds the Pre-COVID-19 Level: 15% of Contracts Signed at Discounted Rates

Ukrainian banks granted 4,652 mortgage loans worth over UAH 3.6 billion in total over the first half of the year. It is almost equal to the whole last year’s amount of mortgage lending (3.8 billion) and 860 million more than in the pre-COVID-19 year. Over 90% of contracts are concluded for the purchase of housing on the secondary market.

ImageData

According to the National Bank of Ukraine, the weighted average effective rate of mortgage interest is 17.3% in the primary market and 13.2% in the secondary market.

However, 16 Ukrainian banks also work under the “Affordable Mortgage 7%” state program with a 7% discount rate. Over six months, 648 loans worth 550.3 million were granted under this program.

Most “discount” mortgage applications were made by households with some UAH 35,000 average income. The total number of applications was 987, out of which 35 (3.5%) were rejected:

ImageData

Reasons for application rejections

Exceeding the income limit	3	8.6%
Applicants have already had housing	2	5.7%
Exceeding the area limit	2	5.7%
Negative credit history	9	25.7%
Having large debts	3	8.6%
Attempts to repeatedly participate in the program	3	8.6%
Inappropriate investment property	1	2.9%
Other	12	34.3%

Discount loans are mainly given by five banks: Kredobank (UAH 135 million), Ukrgasbank (118 million), Oschadbank (111 million), Globus Bank (96 million), and PrivatBank (81 million). Two-thirds of all applications are made from Kyiv and the region.