Oleksandr Klymenko Official website
Articles | 1113 | 07.04.2017

Mortgage for IDPs

People often ask me different questions. The most frequently asked questions are related to their financial problems, namely, housing and work.

More than 1.5 million IDPs are registered in Ukraine. They left their houses, property and moved due to the war. Of course, they hope that it is temporary.

However, plethora IDPs have only casual earnings during the last three years. They receive scanty state assistance and double portion of humiliations from officials. Well, I’m not talking about the fact that IDPs are deprived of the right to vote. Though, I saw the interesting news. Frankly speaking, I was glad to see it. Oschadbank – the state bank – launched the program of mortgage credit lending for IDPs. In addition, the loan is granted for 30 years. I thought that people would have an opportunity to buy an apartment or house, start settle in a new place. However, when I looked through the credit conditions for IDPs, my hands clenched into a fist.

IDPs should purchase housing on the secondary market. Moreover, such real estate will be in a bank mortgage until the loan is fully repaid. There is also an “alternative” that sounds like a mockery. Another real estate, which belongs to an IDP or his guarantor, can also be pledged.

The next condition: an IDP should pay 10% of the cost of housing as a first installment. Let’s suppose that an apartment costs USD 34 thousand (it is enough money to buy 50-meter two-roomed flat somewhere near Syrets or Lukyanovka in Kyiv).

Just imagine that an IPD, who lives in rented apartments during the last two years, without any savings, must immediately pay $ 3,400 (almost UAH 92 thousand).

The Oschadbank also declared that the loan rate will be fixed during the 30 years. Thus, it will not be decreased. How should we understand this? If the rate is not decreased, it means that Ukrainian economy will “lie” during 30 years. However, I decided to carry out simple calculations. In particular, what would be the interest if the citizen made a first installment and received a loan amounted to USD 30,6 thousand?

So, in case of annual payment of USD one thousand dollars, the loan will be amounted to USD 96 thousand during 30 years. Thus, it is three times more than the loan itself.

During the first year, an IDP will have to pay UAH 15,500 per month (the loan itself is UAH 2200 and UAH 13,300 hryvnia is interest). Will he find such funds? – There is nothing to count, of course, no.

Do you know what is the most interesting thing in this story? Oschadbank receives 4% (maximum) of credit resources. Meanwhile, Ukrainians pay 20% interest. Thus, here we can see an excess profit amounted to 16%. This excess profit will not go to the budget of the country. However, it will be redirected to the pockets of oligarchs, who are close to the power.

For instance, the percentage of mortgage loans is between 2 and 4 in the EU countries. The power does not exaggerate their “margin” there. They really help people with housing. However, we have another Europe here, in Ukraine under the guidance of Poroshenko-Groysman