Ukrainian banks reported having issued 997 mortgages to the total amount of UAH 789.1 million in April 2021. New mortgage loans increased by more than a third compared to March 2021, and grew almost ten-fold compared to the crisis-stricken April 2020, when new mortgage lending almost stopped. The number of new agreements rose by a third in monthly terms and was 7.1 times larger year-on-year.
This is evidenced by findings of the latest bank survey on retail mortgage lending.
Overall, banks issued 2,808 mortgages to the total amount of almost UAH 2.2 billion in the first four months of the year. Compared to the same period last year, new mortgages more than doubled in terms of the number of agreements and almost tripled in value terms.
Mortgages to purchase property on the secondary market are the main driver of the growth in mortgage lending. However, new mortgages to purchase primary market property increased sharply in April. This was partially a result of the Affordable Mortgage 7% program. Compared to March 2021, in April volumes of mortgages issued to purchase secondary market property increased by a third, by UAH 168.5 million, while mortgages to purchase property on the primary market grew 1.5 times, by UAH 43.2 million.
Mortgages issued for house purchase on the secondary market accounted for 87% of all issued loans.
The average loan for house purchase continued to grow, reaching UAH 791,000 in April. The average size of a new mortgage to purchase primary-market property was UAH 925,000 in the reporting month. The average size of a new mortgage to purchase property on the secondary market was UAH 771,000.
Bank surveys show that the mortgage lending market is very concentrated. Five banks accounted for 90% of new agreements.
The weighted average effective interest rate on mortgages to purchase secondary market property decreased to 13.5% (down from 14.0% in March). This figure stood at around 17.4% for mortgages to purchase property on the primary market.
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 this data sheet. This approach better reflects the type of collateral for loans, and thus the loan categorization criteria.