Sviaz-Bank Introduces New Mortgage Standards
OREANDA-NEWS. June 20, 2014. Sviaz-Bank (Vnesheconombank Group) is about to introduce new standards applying to current mortgage programs for a broad spectrum of borrowers.
The new standards facilitate the interest rate setting mechanism, and increase transparency and affordability of the Your Mortgage (secondary market) and New Home programs.
From now on, the base interest rates charged on mortgages will only depend on the amount of the down payment and loan program type. No incremental coefficients will be applied to interest rates as charges for the quality of credit history, loan time, and income confirmation form.
In particular, a uniform interest rate has been fixed on mortgages taken out under the New Home program for the full duration of the mortgage, from the construction stage to the mortgage repayment date, without any changes made in the interest rates once title has been taken to the real property – now it is up from 11.4% per annum. The interest rates have been lowered by 0.2 to 0.4p.p. for employees of the Bank’s partner companies, who are put in the preferential category of borrowers. The minimum interest rate under the Your Mortgage and Maternal Capital programs will now be up from 11.3% per annum in rubles.
Other key innovations include waver of commission for the issue of mortgages under the Your Mortgage, New Home, Maternal Capital, Your Garage, and Big Mortgage Loans programs.
No changes have been made in the rules applying to borrowers. A Russian citizen between 21 and 65 years of age with the latest work record more than four months and at least one year in total work record, who produces a 2-NDFL certificate or fills in the Bank’s certificate form to confirm his/her earnings is eligible for a mortgage. The minimum down payment must be 10% of the loan amount under the Your Mortgage and New Home programs, and mortgages start at 400,000 rubles up.
“The basic trend current in the market these days is toward simplifying the interest rate structure, and we are striving to make them more comprehensible to our customers,” said Olga Oleinik, Vice Chair of Sviaz-Bank’s Management Board. “Now, we have waived incremental coefficients, dropped extra commissions, and made interest rates independent of the loan time. We are following changes in the mortgage and consumer credit market and offering our customers affordable interest rates and other loan terms.”