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The Ministry of Finance: “Concessional lending has become obsolete”

Banks
28.07.2020
151
The Ministry of Finance: “Concessional lending has become obsolete”

The updated program of preferential mortgages should be left anti-crisis without expansion, says Deputy Finance Minister Alexei Moiseev, writes RBC.

A significant expansion of programs can turn into a pyramid for the country’s budget, since it is unknown at what level the refinancing rate will be in a few years, argued Moiseev. He also recalled that subsidized rates below market value cannot be refinanced. Based on this, the “life” of such loans will last longer than the usual seven years — up to twenty on average, so it is very difficult to predict budget revenues.

Discussing the preferential mortgage, the expert noted that it is already becoming obsolete, since most banks are offering rates below the threshold of 6.5%.

An additional danger is posed by the possible increase in the debt burden of citizens who cannot afford a mortgage. In this case, there is a risk of inflating a bubble among borrowers who are not solvent enough. According to the Ministry of Finance, only 60% of citizens can afford a mortgage.

In April, Vladimir Putin offered to open a preferential mortgage program, thanks to which citizens will be able to get a loan at 6.5%. The current program will last until November 1, its maximum terms reach thirty years. Initially, the peak loan amount reached eight million rubles in Moscow, St. Petersburg and the Leningrad region, in the rest of the regions — three million rubles.

According to the Central Bank, from May to June, the sum of subsidized loans reached 160 billion rubles. At the same time, banks used only 20% of the allocated limit. Some credit companies used up the rate and were forced to stop issuing soft loans. The subsidized mortgage program itself has boosted lending in the industry. The United Credit Bureau announced that the level of approved loans in June doubled compared to the same month last year.

Author:Елена

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