The BANK OF MOSCOW has issued an unprecedented decision on the mortgage lending market. On June 1, 2006, the bank is to increase the term of mortgage credits provided under its own program from 15 to 25 years and simultaneously cancel downpayment for borrowers. Currently, most banks require downpayments as a condition for issuing a mortgage loan. Downpayment makes up 10% to 30% of the cost of an apartment or a house the borrower plans to buy using the bank’s credit. The BANK OF MOSCOW plans to keep other lending terms unchanged according to its mortgage lending program. Specifically, the interest rate remains unchanged, from 13% in roubles and from 10% in foreign currency. The credit will be paid monthly in equal instalments and can be redeemed before its term in six months without any commission charged. There is no commission for withdrawing credit funds in cash to settle accounts for the purchase of immovables.
Source: BANK OF MOSCOW PRESS SERVICE, May 31, 2006
