The rise in prices has reached 20%
For the last three months the rise in prices on the Moscow real estate market has reached 20%, whereas deposit interest rates don’t exceed 13%. In this situation it’s almost impossible to save up for a flat in Moscow or nearby. As a result, mortgage seems to be the only option for buying property. At the same time one should keep in mind that if your family overall monthly income is less 1 000 USD, you won’t be able to get a credit even for a three-room flat in an outlying suburb. And after all, you’ll have to pay 5 000 USD as an initial installment.
Housing in Moscow goes up in price each month by 5-7% on average. Occasionally, once you’ve bound a bargain, the seller up values the property explaining this by real price rise on the real estate market. You thus can’t keep pace with the price growth and save up the necessary sum of money. In this case mortgage not only secures the majority from lack of funds, but appears to be the only possible option to buy a flat. Especially so, as different mortgage programs become more attractive for the debtors.
Apart from property getting more expensive, the fact that credit becomes cheaper also counts in favor of mortgage. In the previous year there was a mass decrease in mortgage rates by 2% on average. Besides, the initial installment rate dropped and credit periods extended.
Worth mentioning is a new credit type with floating ruble rate. It has been offered by Delta credit bank with the rate tied to MosPrime index. At the end of February this year the bank registered the record-low ruble rate for this type of product – 10.5%. Mortgage rates within currency programs offered by some banks get close to 9%. Credit periods increased up to 20-30 years. Moreover, today the initial installment rate makes up 15% of the flat cost, whereas earlier one should have paid 30% at once.