For information on how to apply for a housing loan, read the overview by journalist RBK-Ukraine Alik Sakhn. This is reported by Kontrakty.UA.
Before the war, the Ukrainian mortgage market was rapidly growing. Even in 2020, despite the coronavirus pandemic, the number of loans increased by more than a third compared to 2019. This was made possible by the decrease in interest rates, which stimulated demand for housing loans. However, the market collapsed after the onset of Russia's large-scale invasion in 2022.
As of December 2024, the monetary volume of housing loans has not only surpassed last year but also the pre-war year of 2021, which was the most successful. According to information from the Ministry of Economy, since the beginning of 2024, Ukrainians have taken 8,515 loans totaling 14.6 billion UAH for housing purchases under the "eOselya" program.
Standard Mortgage Conditions
Standard mortgage loan conditions in Ukraine can vary significantly from one bank to another. Loans are provided to citizens aged 18 to 70, although some banks set different limits, for example from 23 to 65 years.
The annual interest rate directly depends on the discount rate of the National Bank of Ukraine, which stood at 13.5% at the end of 2024. Consequently, the cost of a housing mortgage ranges from 14% to 30% per annum.
For instance, for a housing loan of 1 million UAH at 20% per annum, one would have to pay the bank 200,000 UAH in interest per year. The standard down payment usually constitutes 30-40% of the property value, which in this case would amount to 300,000 to 400,000 UAH.
Loan repayment is made monthly according to the payment schedule, and the size of the monthly payment depends on the rate, amount, and term of the loan. For example, at a rate of 20% per annum and a loan amount of 1 million UAH for 20 years, the monthly payment would be about 17,000 UAH.
Interest rates for standard mortgage loans can be either fixed or floating. Banks with a fixed rate change it only in the first year, as it reflects the actual interest rate. This indicator considers the total cost of the loan, including all additional expenses: fees, insurance payments, administrative charges, etc.
For example, OTP Bank offers a fixed annual rate of 29.99% on a mortgage loan ranging from 200,000 to 750,000 UAH for a term of 1 to 5 years. In real terms, this rate would be between 36.47% and 42.79%. However, this rate must be paid only for the first year, after which it returns to 29.99% per annum.
Banks with floating rates tie them to the UIRD index (Ukrainian Index of Retail Deposit Rates), which reflects the average rate on deposits from individuals in UAH. As of December 25, 2024, the UIRD is 12.83%.
For example, Bank Credit Dnipro offers a mortgage loan ranging from 300,000 UAH to 10 million UAH for up to 25 years, with a fixed annual rate of 20% for the first year. However, from the second year, the annual UIRD index, which may be 13%, and a margin of 5.9% will apply. This means that from the second year, the interest rate on the loan will be almost 19%, which is one percentage point lower.
Obtaining a Mortgage under the "eOselya" Program
The "eOselya" program is implemented through ten partner banks: Oschadbank, Privatbank, Ukreximbank, Globus Bank, Sky Bank, Ukrgazbank, Sense Bank, BISbank, Radabank, and Bank Credit Dnipro. They provide mortgage loans at 3-7% per annum for terms ranging from 1 to 25 years for amounts from 100,000 UAH to 12 million UAH.
The interest rate depends on the borrower's category and professional activity. A loan at 3% per annum is provided to public sector employees, including:
- Security and Defense Sector (military personnel, law enforcement, emergency service workers, border guards, SBU, etc.).
- Employees in the Medical Sector (doctors, nurses, staff of state medical institutions).
- Educators (teachers, lecturers, educators of state educational institutions).
- Scientists working in state scientific institutions.
- Borrowers must not own other housing or real estate that does not meet sanitary standards.
A loan at 7% per annum is available to other citizens of Ukraine under the following conditions:
- Official income, creditworthiness, and age from 18 to 70 years (at the time of loan repayment).
- No personal housing or existing housing that is less than 52.5 m² + 21 m² for each additional family member, or located in a combat zone or temporarily occupied territory.
- The borrower is not on sanction lists and is not a participant in other state housing provision programs.
After registration and submitting an application in the "Diia" app, the bank begins its review. A package of documents must be provided, including a passport, identification code, income statement, proof of employment in one of the privileged categories, and documents regarding family status.
Simultaneously, it is necessary to select housing that can be purchased under the "eOselya" program. The program allows for the purchase of both new builds and secondary market real estate, provided it meets the bank's technical requirements and is appraised by a certified expert.
It is important to consider that in the first year, the actual rate will also be higher than 7 or 3 percent. For example, the actual interest rate for a 25-year loan of 1 million UAH from Sense Bank is 7.74% and 3.36%. According to the program, in the 11th year, loan rates will increase from 3% to 6%, and from 7% to 10%.
Remember, the down payment size for the "eOselya" program for youth has been reduced: how much needs to be paid.