Ukrainian banks reported having issued 843 mortgages to the total amount of UAH 666.9 million in May 2021.
Overall, in the first five months of the year, banks issued 3,651 mortgages totaling more than UAH 2.8 billion. The number of new mortgage agreements was almost 2.5 times the level of the same period last year, while they more than tripled in value terms.
This is evidenced by findings of the latest bank survey on retail mortgage lending.
Loans to purchase residential real estate on the secondary market continue to dominate the market: in May, their share was 89% of all issued mortgages by number and 87% by volume.
The average loan for house purchase stood at around UAH 791,000 in May. At the same time, the average size of a new mortgage to purchase primary-market property declined to UAH 878,000 in the reporting month, down from UAH 925,000 in April. In contrast, the average size of a new mortgage to purchase property on the secondary market grew to UAH 780,000, up from UAH 771,000.
Bank surveys show that the mortgage lending market is very concentrated. Five most active banks accounted for more than 90% of new agreements.
The weighted average effective interest rate on mortgages decreased in May for both segments: to 15.7% (down from 17.4%) for the primary market and to 13.4% (down from 13.5%) for the secondary market. Interest rates on mortgages to purchase primary-market property declined markedly in May, as one of the banks active in mortgage lending, which offers a relatively high effective interest rate, saw its share in new mortgages drop.
The monthly surveys of banks represent banks’ own assessments of their mortgage portfolios. Therefore, they may differ from the official data published in the Statistics section of the NBU’s official website.
The reason for such differences primarily lies in banks using management reporting data to compile their mortgage portfolio data sheets. This approach better reflects the type of collateral for loans, and thus the loan categorization criteria.