Currency mortgage expert in 2018 will be much cheaper, but latest news alert about a new stage of weakening of the ruble, which will affect the increase of the debt. In addition, the banking sector has not yet resolved the issue with troubled borrowers who can’t service their loans. The government and the Central Bank offered to banks and borrowers to negotiate the mechanism for restructuring foreign currency debt.
Latest news: 2018 currency mortgages will be cheaper and risky
At the end of last year, there was a marked recovery in the mortgage market. A reduction in interest rates due to the support from the state provided growth in the number of mortgage loans 27% (to 1.47 trillion). In 2017, the cost of mortgages continues to decline, in response to the correction of the discount rate of the Central Bank. According to forecasts of the head of Sberbank German Gref, this year mortgage rates will be updating the historical minimum. This trend will contribute to a slowing of inflation, which will allow the regulator to continue the reduction of the key rate. Experts accept lower rates on ruble mortgage to 7-8% per annum, which will significantly increase the attractiveness of this instrument. In this case a currency the mortgage is more risky, which is reflected in the choice of the customers. Despite lower rates, foreign currency mortgage expert have ceased to be in demand. In 2016, only 34 of the borrower issued a mortgage with reference to the currency, compared to more than 850 thousand of ruble loans. While currency borrowers prefer short – term loans- the average tenor of the loan agreements was 3 years.
The choice of the borrowers associated with the previous experience during the economic crisis. Unlike the ruble mortgage servicing foreign currency loans has become a real problem for ordinary citizens.
The share of problem mortgages in early 2017 close to the mark of 3%. The main reason of overdue loans remains sharp weakening of the ruble. Among the total volume of ruble mortgage expert, only 1.1 per cent of borrowers moved into the category of problem. The corresponding figure for foreign currency mortgage reaches 31,3%, which will remain in force in 2018. The share of overdue foreign currency mortgage loans continues to increase, experts emphasize that due to the influence of several trends. Faithful customers aim to quickly close the foreign currency credit that is due to the expected weakening of the ruble. As a result, the proportion of borrowers who faced with financial difficulties. Alpha Bank’s analysts do not predict a substantial increase in the volume of foreign currency mortgages in 2018. The main factor of risk is volatility of currency rates, which can significantly increase the amount of required payments. Next year the dollar may rise to 70 rubles/dollar. In such circumstances, even lower rates on foreign currency mortgages will not be able to increase the demand for the use of this tool. Currency risks remain the problem of the borrower, confirming the recent decision of the Supreme court. Troubled borrowers can expect to vacation credit and the conversion of the loan into rubles at the current rate. However, to translate foreign currency mortgages in the ruble loan at pre-crisis exchange rate, banks refuse, intending to shift the loss onto the shoulders of ordinary borrowers. In such circumstances, the prospects for monetary mortgage for the next year remain vague. Amid the recovery of demand for ruble-denominated mortgages, foreign currency loans remain too risky.
Prospects for next year
In 2018, the trends of the mortgage market will remain unchanged, experts predict. Correspondent mortgage will show an increase of 20-25% due to a further reduction in the cost of borrowing. In this way, customers will be able to satisfy pent-up demand accumulated during the economic crisis.
Foreign currency mortgages will remain largely untapped. Individual borrowers can use foreign currency loan, avoiding long duration and large payments. In turn, banking institutions will continue to address the issue of accumulated bad debts, which next year will remain at a high level. A new stage in the growth of the dollar will be the next challenge for foreign currency borrowers, which are already experiencing huge difficulties in servicing their debt. The improvement of the economic situation portends the restoration of income growth, however, significantly change the situation in the mortgage market, this trend cannot. Recovery of foreign currency mortgages will be possible after the stabilization of the dollar. However, the movement of currency rates is tied to trends in the oil market. Instability of the US currency will continue in the medium term, which will make long-term loans less attractive. To change the situation cannot even a credit rate that will be 2-3% lower ruble mortgage.