Types of mortgage loans. Types of mortgages in Russia Mortgage types of mortgage loans

real estate mortgage loan housing

Types of mortgage lending can be distinguished in the context of various values:

· In terms of lending programs;
· Economic types of mortgages;
・On target
By type of collateral.
· Governmental support.

From the point of view of mortgage lending programs, there are:

1. When mortgaging a primary residence prior to registration of ownership, only the life and disability insurance of the borrower is required. In the case of primary home mortgages, more often resort to cashless money transfer, which saves money on cashing out, for which many banks charge a commission. For non-cash transfers, some banks also charge a fee, but it is usually less than similar fees for cash transactions.

At present, not all Russian banks operate under primary housing mortgage programs. In particular, the Siberian Bank of the Savings Bank of Russia, VTB 24 Bank, Gazprombank, Bank Accept, Alemar Bank, Absolut Bank, Home Credit and Finance Bank, ORGRESBANK, Levoberezhny Bank, TransCreditBank, Moskommertsbank operate under primary mortgage programs.

2. Second home mortgage. With a mortgage of secondary housing, after the conclusion of the contract, a significant down payment is required, which usually amounts to up to 30% of the cost of the future apartment. Another difficulty is that the amount of a secondary housing mortgage rarely exceeds 75-80% of the value of the house. It is very important for Russian buyers that secondary housing mortgages are more affordable. In addition, with a secondary mortgage, the future owner of the house moves into it immediately. When working on a secondary housing mortgage, banks can consider not only official, but also “gray” income. Real estate agencies actively work in this market, they analyze the possibilities of the client and compare them with the conditions of various mortgage programs of the city.
3. Mortgage of housing under construction. The advantage of mortgage housing under construction is that you become the owner of a new building.
4. Mortgage of luxury housing is becoming more widespread in Russia. The rise in prices in the real estate market today averages 15-20% per annum.
5. Mortgage of suburban real estate. Today, a mortgage can be issued not only for urban housing, but also for buying a house on credit or building suburban real estate.
6. Mortgage of land and land plots. The main difference between the mortgage of residential premises and the mortgage of land plots is that the mortgage of a house is impossible without simultaneous collateral and the land plot under this house or part of it, which functionally provides the house.

Economic types of mortgages:

1. Primary mortgage - implies a priority right of satisfaction from the mortgaged property, which is legally stronger than all other mortgage rights.
2. Secondary mortgage - issuance of a loan secured by the property, which is already burdened with a mortgage.
3. Closed mortgage - a real estate pledge agreement that secures a loan obligation, under which early repayment and secondary use of the same obligation are prohibited.
4. Permanent mortgage - a pledge agreement that secures an obligation providing that only interest is paid during the entire term of the agreement, while the principal amount is paid upon the expiration of the loan agreement and the mortgage agreement.
5. Accepted mortgage - implies the transfer of the mortgage loan obligation to the purchaser of the mortgaged property. In this case, the buyer of real estate is assigned the obligation for the outstanding loan, while the previous owner bears secondary liability.
6. "Spring" mortgage - this is a real estate pledge agreement, according to which the obligation to repay the loan consists in making equal periodic payments to repay the principal amount of the debt, as well as interest payments. Thus, with the implementation of each payment, the total payment decreases.
7. Rollover mortgage (from English - Roll over - turn over) - this is a mortgage lending agreement that provides that the loan term is divided into equal time periods (usually 3 months or 6 months) and each of these segments has its own percentage rate (that is, a floating interest rate) depending on the situation that develops in the market. A variation of a roll-over mortgage is a renegotiable mortgage, that is, an agreement under which the interest rate changes to reflect prevailing market rates at regular intervals.
8. Reverse annuity mortgage - an agreement under which the lender makes periodic payments to the borrower. At the same time, the balance of the principal amount of the loan increases by the entire amount of accrued interest and by the amount of periodic payments made.
9. Mortgage with differentiated payments - a mortgage loan with a fixed rate, payments for which the repayment increases; the repayment schedule as a whole does not change, but payments gradually increase.

Mortgages by target area:

1. real estate loan
2. home mortgage
3. home mortgage
4. mortgage on a country house
5. mortgage on an apartment
6. mortgage for an apartment in a new building
7. mortgage on the room
8. mortgage on a cottage
9. mortgage on new buildings
10. mortgage for the purchase of an apartment in a new building
11. home loan
12. a loan to buy an apartment.

Mortgages by type of collateral:

1. loan secured by a house
2. loan secured by property
3. loan secured by an apartment
4. loan secured by a cottage
5. real estate loan.

Governmental support

social mortgage for youth
state support for young families
social mortgage for the military
· social mortgage in the regions.

Mortgage classification

Mortgage loans are classified according to various criteria.

1. By property.

2. According to the purposes of lending. The following are considered as such goals:

Acquisition of ready-made housing in an apartment building or a separate house for one or more families as the main or additional place of residence; purchase of a house for seasonal residence, summer cottages, garden houses with plots of land; acquisition of land for construction. As a rule, loans for the purchase of finished housing are provided in a single one-time payment;

Credit for the construction, reconstruction, overhaul of individual housing, seasonal residences, for the engineering arrangement of a land plot;

Construction and purchase of finished housing for the purpose of investment. This lending for housing construction is carried out in stages: each subsequent payment is made only after the completion of its previous stage.

3. According to the type of lender, mortgage loans can be:

banking;

Non-banking.

4. By type of borrowers:

a) as subjects of lending:

Loans provided to developers and builders;

Loans provided directly to the future homeowner;

b) by the degree of affiliation of borrowers:

Loans to bank employees;

Employees of firms-customers of the bank;

Clients of real estate companies;

Persons residing in this region;

To everyone.

5) By terms of loans. Comparative characteristics of term periods for some countries are presented in Table No. 1 in the Appendix. According to this table, it can be concluded that different countries define the periods in different ways. In my opinion, the most optimal distribution of terms is represented by the UK. And credit terms in Russia are very narrow. After all, if we imagine that a person plans to buy an apartment with the help of mortgage lending, then it is difficult to imagine how much he will have to pay monthly in order to repay such a loan in 3 years. This once again proves that mortgage lending is the weak side of our state.

6) By type of interest rate:

Loan with a fixed interest rate;

A loan with a variable interest rate.

7) If possible early repayment:

With the right of early repayment;

Without the right of early repayment;

With the right to early repayment subject to payment of a fine.

8) According to the degree of security (the amount of the down payment). The loan amount can range from 50 to 100% of the value of the mortgaged property.

Types of mortgage loans

In the system of mortgage lending, several different types of loans can be distinguished in accordance with the nature of payments.

1. Permanent mortgage loan.

2. Loan with constant payments.

A permanent mortgage loan is the simplest form of loan. It is typical for countries with low inflation, long loan terms and involves equal repayments (amortization) at regular intervals. Therefore, such loans are classified as self-absorbing. Amortization in this case means the process of paying off principal and interest on a loan.

Loans with variable payments are not self-absorbing and provide for different repayment periods of principal and interest, as well as other additional conditions. This type of loan has subspecies, which will be given below.

Loans with ball payment. Provide for a one-time (ball) payment. It also includes three varieties:

With freezing interest payments until the expiration date. This type of loan does not provide for any payments both in repayment of the principal debt and urgent interest. Repayment of the loan and capitalized interest on it is made at the end of the term. The use of this type of loan is quite limited;

Paying only interest. It is envisaged that interest on the loan will be paid regularly during the term. While repayments of the principal amount of the loan are planned at the very end of the term;

With partial depreciation and final balloon payment. Provides that payments will be made partially until the end of the loan term.

A spring loan, or a loan with a fixed principal payment. Assumes regular equal payments on account of repayment of the main debt.

Loan with participation in income and value growth. This type of mortgage loan is used to finance profitable real estate. It is close to self-depreciating, but it assumes that the creditor, regularly receiving the principal and interest on it, participates in the income from the object. The participation of the creditor can be different: he can claim a part of the excess of the rent, part of the excess of net operating income, a part of the capital gain or proceeds received from the sale of real estate.

A loan with increasing payments (with an increasing annuity). This loan provides for equal payments throughout the term and is used by the owners of rental properties in the expectation that payments will increase annually (or at other intervals). Such loans are used when the borrower's income at the beginning of the loan term is less than at the end. The features of such a loan are as follows: the minimum first installment, then the installments increase at a constant pace; at a certain stage, equal payments begin under the scheme of a self-absorbing loan. A sequence of payment sizes is set with an increase in installments at regular intervals, the amount of the last installment is determined by the amount of the balance of the debt on the loan.

Reverse annuity loan. On the contrary, it implies a reduction in loan payments at the end of the term or their termination. In this sense, this loan is comparable to an interest freeze loan.

Loan with a variable rate. Usually "tied" to one of the money market indices, inflation, currencies, allow you to pay a loan at a variable rate with restrictions on its minimum and maximum values. Changes in rates affect the terms of loans.

Canadian rollover. This is a mortgage loan, in which its term is divided into time periods (3 or 6 months) and for each of them, taking into account market conditions, its own interest rate is set. Thus, a roll-over loan is a loan with a floating interest rate. In this it differs from a loan with a fixed interest rate ("spring" mortgage)

Final mortgage. The essence of this type of lending is that a second loan is provided for already accredited real estate, the payments on which are sent to repay the first loan. Interest rates on such loans are usually higher than on the first loan.

Loan with added interest. Provides for the assignment of interest to the principal debt, and the result is divided by the number of repayment periods to determine the size of the next payment. Such loans are used for lending personal property, a car, for example, and suggest the possibility of early repayment of the loan.

Absolutely everyone needs a place to live. But not everyone can afford to buy it right away, without getting into loans. That's why you have to take out a mortgage. The solution, of course, is not the best, but very common. But every person who is not enlightened in the subject is first interested in: what types of mortgages exist in principle? And, since the topic is relevant, it is worth talking about it in a little more detail.

The most common option

Arguing about what types of mortgages exist in principle, it is worth first of all to pay attention to lending in the secondary market. Because this is the most popular option. The principle is simple. A person must find an apartment that other people are selling and draw up a mortgage loan agreement. After that, he buys housing for the bank's money, which he then gives to them.

There are some peculiarities here. First you need to find the most suitable bank according to the conditions. The best in this regard are those that are state-owned. They have a mortgage loan system worked out to the smallest detail.

After a person chooses the most favorable mortgage offer for himself, and finds out the amount that can be given to him, you can start looking for housing. And before the contract is drawn up, you will need to pay the bank a commission and insurance.

About conditions

Talking about the types of mortgages, it is impossible not to pay attention to what kind of secondary housing it can be issued for.

So, the apartment should not be located in a house to be demolished, or requiring repair and rebuilding. It is desirable that it be in good condition. After all, a mortgage is issued up to 30 years, and the bank is obliged to make sure that if a person cannot pay the debt, then he will be able to compensate for the losses by selling housing.

The apartment must also be habitable. That is, to be in an ordinary house, and not belong to a hotel or communal complex. And it should also have a standard layout that matches the BTI plan. By the way, banks rarely give mortgages for the purchase of apartments located on the ground or first floors. And on "Khrushchev".

The borrower must also meet certain conditions. He must be a solvent citizen of the Russian Federation with at least one year of work experience. And it is better to refrain from a loan if the salary is low, since every month you will have to give up to 45% of your salary.

With equity participation

In the list, which lists the types of mortgages, this particular one takes the second place. There are reasons for this. An equity mortgage is essentially a loan to buy a home in a home under construction. And, due to the fact that the building has not yet been put into operation, the prices for such apartments are 20-30% lower than for ordinary ones.

The principle in this case is somewhat different from the previous one. To begin with, a person must choose a developer. He will send him a list of banks that cooperate with him. And among them, a person chooses the one that offers the most favorable lending conditions. The second option is similar, but exactly the opposite. First, a person determines the bank, and then chooses the developer - from the list that was handed to him there.

True, there are also disadvantages in this case. For example, a higher interest rate (by 1-2%), a delay in the commissioning of an object. However, there are downsides everywhere.

For a young family

In recent years, this particular mortgage has been gaining great popularity, helping many, especially if a young family needs housing. The bottom line is that local authorities allocate a subsidy, with which people pay the first installment. Thus, it turns out to reduce the amount of the loan.

A childless family is allocated 30% of the cost of the apartment. People who have a child - 35%. To get a preferential mortgage, you need to get on the waiting list. When the turn of this or that family comes, they are given a certificate for the purchase of an apartment. This is the way to the first installment in the bank for a loan.

You should know that couples in which each person is not older than 35 years old are considered a young family. Mortgages are given for up to thirty years. But delays are possible (this is another plus of preferential lending), and together with them it turns out about 35. However, even to get such a mortgage, you must meet several conditions. First, each spouse must be a citizen of the Russian Federation. And officially employed, with a source of income that can be confirmed by a certificate. The minimum age for each person is 18 years.

Home Improvement Loan

This topic should also be noted with attention, talking about the types of mortgages. Many people already have housing, but often the family needs either to expand their living space or to improve conditions. These issues are usually easy to resolve. People sell the apartment they have, after which they buy other housing with the proceeds, paying extra with the money issued by the bank as a mortgage.

The main advantage of this type of lending is that it can be issued without collateral and commissions. They also widely practice local and federal programs, providing preferential terms for teachers, for example, for families with many children, etc. Moreover, a loan for improving housing conditions can be issued even without providing a certificate from a permanent place of work. And interest rates are lower.

Information for foreigners

Many people who are citizens of other states are interested in the question - is it possible for them to get a mortgage with a residence permit? The topic is interesting. Well, anyone can buy a home in the Russian Federation. But to do this not for the full amount, but by taking a loan, is very difficult. Financial institutions try to avoid transactions with foreigners, since they do not have Russian citizenship, which means that they can easily leave the country without repaying their debt. In this regard, banks are tightening their requirements in relation to borrowers as much as possible. However, there are also banks that consider foreigners the most conscientious payers. But in general, a mortgage with a residence permit is a reality. But you can talk about the conditions in more detail.

Requirements

Well, if a foreigner decides to take out a mortgage with a residence permit, then he needs, firstly, to be officially employed in Russia. Also pay taxes and have at least six months of work experience in the Russian Federation. You will also have to prove the fact that the foreigner will work in Russia over the next 12 months. You can simply provide a contract with the employer and a certificate of income. Age also matters. The most optimal - from 25 to 40 years.

But some banks put forward additional requirements. For example, the minimum work experience in the Russian Federation may be not 6 months, but two or three years. And the down payment, which is usually 10%, will increase to 30%. Guarantors or joint borrowers (citizens of the Russian Federation) may be required. And the bank will issue the credited real estate as collateral. And, of course, there will be an increased interest rate. In general, it is quite difficult for foreigners to get a mortgage.

They differ in certain nuances, and this situation is no exception. A foreigner will have to collect a whole package of documents, in addition to the standard ones (certificates of income, length of service, contracts with an employer, etc.). You will need your civil passport and a notarized copy with a translation into Russian. Also - permission to work in Russia and to enter the state (visa). You will also need a migration card and registration in the region where the loan is issued.

Pledge

Everyone is well aware that in order to get a loan, it is necessary to provide the bank with a certain value, which he can take for himself as compensation for the outstanding debt (if the payer is not able to repay the money). Mortgages are no exception. The type of collateral in this case is real estate. Which a person intends to acquire by taking a loan.

Everything is simple here. A person draws up a loan at a bank (or other financial institution), with the condition that the apartment purchased with the allocated money will act as collateral. All participants in the transaction benefit. The borrower finally receives the money and buys the apartment. The bank makes a profit in the form of payments at an interest rate, and due to the fact that the housing purchased by the client is the collateral, it minimizes the risks of non-repayment.

And everything is done in a few steps. First, the client receives the approval of the bank. Then he chooses housing, studying the primary and secondary markets. Then - evaluates and insures the property. And, finally, he signs the contract, receives money, pays for the transaction, and then moves in.

About "pitfalls"

Now it is worth talking about the encumbrance in the form of a mortgage. The word itself already contains the essence of the definition. The encumbrance of an apartment purchased with a mortgage is expressed in limiting the rights of the owner, as well as in imposing duties on him.

To put it simply, a person can transfer his housing for temporary use to others, rent it out, or try to sell it to pay off a debt. But all this - only with the permission of the mortgagee. The role of which in this case is the bank. All encumbrances are removed from a person when he repays his debt. From that moment on, he becomes the full owner of the apartment.

But if, for example, he wants to sell it when the debt has not yet been paid, he will have to take care of the nuances. In addition to the sale and purchase agreement, you will need a deed of transfer, written permission from the pledgee and a statement from the parties to the transaction.

Insurance

It has already been mentioned several times above that the purchased housing will have to be insured. It really is. What types of mortgage insurance are there? There are two of them - mandatory and optional.

So, in any case, you will have to pay insurance. But this is a low cost. By law, the borrower is only required to insure the collateral, that is, the apartment, for the purchase of which the loan is taken. Usually it is about 1-1.5% of the total.

By taking out additional insurance, it turns out to protect your home from damage and loss. And also - the title from the loss of ownership, which can happen due to fraud or double sales. In the end, even the life and health of the client will be protected. After all, a loan for the purchase of housing is taken on average for 10-15 years. This is a long time, and during this period anything can happen to a person, because life is unpredictable.

How to benefit?

Well, mortgages bring profit only to banks and developers, but borrowers also want to avoid getting into trouble. And if you want to save money, it is better to apply for a loan for the shortest possible time. The benefit can be calculated using a simple example. Let's say a person takes 1 million rubles on credit at a rate of 13% per annum. If he took this amount for five years, then he will have to pay 23,000 rubles a month, and as a result, the overpayment will be 366,000 rubles. Having issued a mortgage for 15 years, he will pay 13 thousand rubles each. It's less! Yes, but only at first glance. As a result, he will overpay 1,300,000 rubles. So the timing issue needs to be addressed first.

But which of all the previously listed options is best? You can argue for a long time, listing the pros and cons. To each his own. But judging objectively, the option of buying housing under construction is the best. Firstly, you can save significantly - from 1/5 to 1/3 of the total amount. And an overpayment as 1-3% at the rate will not play a special role here. Secondly, you can not be afraid of delays in terms of commissioning. Now banks enter into contracts only with trusted developers, so the risks are minimal. But again, everyone has to decide for himself.

Mortgage is the mortgage of real estate, and in return obtaining a loan for various purposes.
The main factors that affect the loan amount:

The amount of the borrower's down payment.
The term for which a mortgage loan is issued.
The cost of a purchased house or apartment.
The amount of your monthly income.

The subject of a mortgage agreement concluded between the borrower and the lender is always cash. Monetary obligations must always be expressed in national currency, even if the contract itself uses a foreign currency.

State mortgage

State mortgage involves the issuance of a certain amount of money, only for the purchase of housing. It is impossible to spend the received amount for other purposes. The pledge of this loan is the acquired property.

social mortgage

Social mortgage is designed to provide a certain amount of money to buy a home. The target audience of such mortgages are citizens with low and medium monthly income. The purpose of such a mortgage program is to improve the quality and standard of housing for the poor.

A complete set of required information on social mortgages is issued by the city government, which is responsible for housing policy.

residential mortgage

There are two ways to get a home mortgage: the first option is to get money to buy a house from a bank. Almost all banks currently have their own program for the issuance of mortgage lending. Interest rates currently fluctuate from 11% to 14% in rubles.

Also, the Russian Federation has developed an independent program of mortgage lending for housing. This program has clear requirements and conditions for the issuance of money for housing.

military mortgage

Soldiers can get mortgage loans in exchange for housing. At the same time, the money received by the military as mortgage lending can only be spent on the purchase of housing. Mortgage loans are provided to military personnel after 20 years of service. In order to become a member of the mortgage program for the military, you must become a member of the register of the accumulative mortgage system. The maximum amount provided by banks for military personnel is approximately 3,000,000 rubles.

Social youth mortgage

Today, it is not difficult to find support for a young family. For this, there is a program to help a young family. Construction teams are being revived - up to two hundred shifts are worked out, and a young family receives certain benefits when buying a home.

Tax. Thanks to the tax code of the Russian Federation, you can get a certain amount of money, which is deducted from the total amount of mortgage lending. In order to receive a tax deduction, we collect a package of documents: an act confirming the right to ownership of housing purchased in the mortgage lending program, an act of transferring an apartment or house to the buyer, a loan agreement, documents confirming the costs of processing all the necessary documents for obtaining a mortgage.

The main advantage of a mortgage is that the family does not need to accumulate the necessary amount of money for a long period of time to buy a home. Thanks to the mortgage program, the family now receives housing, and pays during the period indicated in the contract.

Secondly, this is that family members can register in the received house as tenants, and, consequently, receive a residence permit in the city.

The security of the mortgage program is high. In general, even if the borrower loses his job or ability to work, the property received through a mortgage is not lost. The borrower remains the owner.

Not unimportant factor is that the borrower does not pay income tax on the amount that he pays during the repayment of the mortgage.

The primary negative factor of the mortgage is that the borrower overpays twice the market value of housing for the entire repayment period of the mortgage loan. This is the most significant drawback of mortgage lending programs.

Today, there are many mortgage offers, each of which lures in its own borrower. To find the best offer among many mortgage programs, and to choose the ideal one for everyone, dedicated consultants and mortgage brokers will always help.

Mortgages are the most complex banking product. The largest package of documents is submitted for such a loan, the solvency assessment procedure takes up to 2 weeks, and the most stringent requirements are imposed on potential borrowers. And this is natural, because the bank takes a big risk, issuing a large amount for a long time.

But you shouldn't be afraid of mortgages. You just need to know the mechanisms that underlie it, and then your own apartment, house or summer cottage will quickly turn from a dream into reality. And this article describes all about these mechanisms.

What will you learn from this article?

In this article, you will get acquainted with the general questions of mortgage lending:

types of mortgage loans;
Main settings;
repayment methods, etc.

What is a mortgage and types of mortgage loans.

The term "mortgage" comes from the Greek "hipotheke", which means "mortgage" or "pledge". Mortgage is a medium-term or long-term loan ( from 5 to 30 years), which is provided to the borrower against the security of acquired or existing land and / or real estate (apartments, houses, cottages, etc.).

Unlike other types of secured loans (for example, a car loan), all mortgage loans are subject to mandatory registration by law.

Note to the consumer: Upon receipt of a mortgage, a pledge agreement is mandatory registered with the Federal Service for State Registration, Cadastre and Cartography (Rosreestr), and all information about the purchase, sale or encumbrance of any real estate with a pledge is entered in the Unified State Register of rights to real estate and transactions with it. ( Finance Expert at Workle)

There are three main types of mortgage loans, each of which differs in the purpose of lending, opportunities and rates.

These are the types:

Classic mortgage is a targeted mortgage loan for the purchase of real estate in the secondary housing market. In this case, the purchased housing is issued to the bank as collateral as security for this loan.
Loan for a new building is a targeted mortgage loan for the purchase of real estate in the primary housing market secured by the rights of claim on this real estate. When the borrower receives a certificate of ownership, the apartment will be pledged (as is the case with a loan for the purchase of secondary real estate).
Non-purpose mortgage- This is a type of loan issued against the security of real estate owned by the client. The received loan can be used for any purpose, for example, repairs or large purchases. Therefore, a general purpose mortgage loan can be compared to consumer lending for any purpose, but the amounts issued under general purpose mortgage programs are usually significantly higher than the standard consumer loan limit.

Types of collateral and basic parameters of mortgage loans.

There are two types of collateral:

Bail by virtue of law- a pledge on property purchased with credit funds (for example, when mortgage for a new building or classic mortgage).

In this case, the pledge agreement is drawn up simultaneously with the sale and purchase agreement, in which it is written, on the purchase of which the bank provides the client with money. Therefore, in case of systematic non-fulfillment by the client of its obligations to repay the loan, it is easier for the bank to obtain the pledged property in its ownership in court.

Pledge by virtue of the contract- occurs when non-purpose lending when the money is issued on the security of the client's property.

With non-purpose loans, the client can spend money for any purpose, therefore, from the point of view of the law, the relationship between the loan and the collateral under which it was issued is not as clear as in targeted mortgages, Where is the money to buy real estate?. If the client fails to fulfill its obligations to repay the loan, it will be more difficult for the court to transfer the pledged property into the ownership of the bank.

Since a mortgage is, first of all, a loan product, the following main parameters are important for it:

Sum;
Term;
Currency;
Interest rate;
Commissions.

Amount and term of the mortgage loan

With any mortgage loan, real estate (existing or being purchased) is issued as collateral. Since the cost of real estate is very high, the amounts that banks are willing to provide for mortgages are significant. On average, mortgage loans are issued in the amount of 1,000,000 rubles ( the size of the mortgage depends on the solvency of the client, so in each case it is individual.)

mortgage is the most long-term type of lending, since it is very problematic to pay the bank a lot of money taken on credit in a short time. As a rule, mortgages are issued for a period of 5 to 30 years.

The shorter the term of the loan, the lower its cost, but the monthly installment will be quite large. With a longer loan term, monthly payments will be less, but the cost of the loan will increase significantly.

The amount of monthly payments also depends on what type of monthly payments the bank establishes in the terms of the contract.

Types of monthly loan payments

Banks use two monthly payment systems to pay off mortgages:

Annuity payment is the monthly repayment of the loan in equal fixed amounts. These amounts include debt repayments and interest on loans. At first, the borrower pays the bulk of the interest on the loan, and the amount of debt decreases slightly. Most often, banks offer an annuity payment system, as it is clearer and easier for family budget planning.

Differentiated payment- This is a monthly repayment of a loan in unequal amounts and is rarely used by banks. The amount of the monthly payment consists of a fixed amount of the debt to be repaid plus interest on the balance of the loan. Since the amount of debt will decrease evenly every month, the amount of interest on the loan will also decrease. This will also result in lower monthly payments. That is, if with an annuity repayment scheme the amount of the monthly payment is fixed, then with a differentiated scheme, the amount of the debt to be repaid will be fixed.

Currency of mortgage loans and types of interest rates on mortgage loans

As a rule, banks issue mortgage loans in three currencies:

Russian rubles;
US dollars;
Euro.

The size of the interest rate depends on the choice of currency - for loans in dollars / euros it is significantly lower. Therefore, with the same amount of monthly payments, the maximum amount of a foreign currency loan may be higher than in a ruble loan.

Each bank provides the borrower with the opportunity choose the type of interest rate for any mortgage. The rate can be:

Fixed interest rate provides for the accrual of interest established in the loan agreement during the entire term of the loan.
floating interest rate is not fixed for the entire period of lending and is subject to periodic review within the terms specified in the loan agreement. Some banks prefer to revise rates annually, others fix the rate for a certain period, for example, for 3 years, and from 4 years the rate is reviewed annually. The revision of interest rates is associated with indices: Libor 1 and MosPrime 2

1 Libor is an abbreviation for the London InterBank Offered Rate, or the London Interbank Offered Rate. The Libor rate is a globally recognized indicator of the cost of financial resources. According to it, the largest banks in the world are ready to issue loans to other large banks on the London Interbank Stock Exchange.

2 MosPrime is the indicative rate for granting ruble loans (deposits) on the Moscow money market. The MosPrime rate is calculated by the National Monetary Association.

Each of these types of interest rates has its own advantages and disadvantages, which are discussed below.

Features of a fixed interest rate

In Russia, most borrowers opt for a fixed rate.

Advantages A: The fixed rate is easy to understand, personal budget planning and monthly loan payments.
disadvantages: A fixed rate does not always correspond to the realities of the modern market. Let's give some examples.

floating interest rate

Floating rate is more common in Europe and the US. It consists of two parts.

FIRST - changeable - called basic.

What does base part mean? The generally recognized indicators of the interbank lending market are taken as a base: Libor for loans in US dollars and MosPrime for loans in Russian rubles.

SECOND - unchanged - called additional.

What does add-on mean? Banks rarely lend to customers from their own funds. In the case of a floating rate, they take a loan in the financial market at the current rate of the MosPrime or Libor indices (depending on the loan currency), and when lending to borrowers, they add their interest rate to this index. This is the income of the bank.

Note to the consumer: The floating rate is substantially lower than the fixed rate. But when the economic situation is unstable, it can be fraught with a lot of problems for the consumer. ( Finance Expert at Workle)

Features of a floating interest rate

Advantages:

The floating rate set for the first years of mortgage repayment is lower than the fixed rate for a similar loan.

disadvantages:

The floating rate will be recalculated annually after the first years of loan repayment.
The situation in the global financial market changes every year, so it is impossible to predict the size of the floating rate, for example, in 10 years.

Note to the consumer: With sharp jumps in the MosPrime or Libor indices, banks always provide an opportunity for borrowers to abandon the floating rate and switch to calculating loan repayments at a fixed rate. ( Finance Expert at Workle)

The floating rate is indicated as follows (depending on the currency of the loan):

The first part of the formula is the rate of the corresponding index for a certain period (when using the MosPrime index, the floating base rate will be revised once every six months. The value of the floating rate with the Libor index is reviewed once a year.).
The second is the interest rate of the bank.

A floating rate can have a strong effect on the cost of a loan, both in the direction of its appreciation and reduction in price (with a decrease in the index level). This can be seen from the example:

Moreover, it is problematic for a non-specialist in the banking sector to predict the behavior of the index for a long-term period.

Mortgage fees

There are several main types of commissions in mortgage lending:

a one-time commission for issuing a loan;
commission for services of third parties (cost of services);
commission for depositing funds to repay a loan;
commission (fine/penalty) for late monthly payment.

Expert column: “Carefully study the conditions for obtaining and repaying a loan from each partner bank in order to offer the client the best options. Warn him that non-compliance with payment discipline will adversely affect his credit history and in the future it will be difficult for him to take a loan from another bank. (Yulia Pankratova, Finance Expert at Workle)

Loan repayment methods and who can repay the loan

Loan interest starts from the moment of signing the loan agreement and accrual of funds to the client's current account. After that, he will have to monthly (according to the payment schedule) make certain amounts to repay the loan.

The terms of repayment of loans are different depending on the currency in which the loan is issued:

Not only the borrower himself, but any person can make payments on a ruble loan.

RUBLES:

If the repayment is made at the bank's cash desk, he must present his passport and name the account number.
If repayment is made through an ATM, it is enough to know the borrower's account number.

FOREIGN CURRENCY (US dollars, euros, etc.)

You can make payments to repay a mortgage issued in a foreign currency:

the borrower himself his spouse and other close relatives, subject to the mandatory provision of a document, proof of relationship;
any third parties with a notarized power of attorney with the respective rights.

When applying for a loan, the borrower should clarify which documents will be required to make payments by a third party.

Early repayment- this is the contribution by the borrower of such an amount to repay the loan that exceeds the required monthly payment or is completely equal to the balance of the debt and the amount of accrued interest.

There are two types of early repayment:

Partial loan repayment it is possible to recalculate the amount of monthly payments by reducing the principal debt. If the amount of payments remains unchanged, then the term of the loan decreases accordingly, and the borrower will eventually pay less interest.
Upon full repayment of the loan, depending on the time of its implementation, there is also a saving of money due to interest. The size of this savings will be significant if the final settlement of the loan occurs long before the end of its term. This is especially true with an annuity payment scheme.

Note to the consumer A: If you want to repay the loan early, you must notify the bank 30 days in advance. In some banks, this period may be shorter, or no notification is required at all. However, all this must be spelled out in the loan agreement.

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