Lower interest rates on mortgages support Affordable Housing Program, SKB-Bank’s Mortgage Lending Director says

3 July 2007 (08:50)

Federal Mortgage Lending Agency declared that the minimum interest rate on a mortgage would come to 10.75% a year beginning from July 1, 2007. Analysts say a .25% reduction is not too much, but what matters is the government’s very intention to make mortgage loans more affordable.

'Lower interest rates on mortgages actually support the Affordable Housing Program. Provided the country’s economy does okay (that is, if the inflation rates go down), the interest rates are simply bound to decrease even more impressively. In fact, the lowest annual interest rate might amount to a modest 10% as soon as this year; I’d even say it’s not unlikely the rate might drop even lower. Last year, Federal Mortgage Lending Agency reduced interest rates on mortgages thrice,’ SKB-Bank’s Lending Director Anna Samuilova said to a UrBC reporter.

'I’d like to point out, though, that mortgage loans are already available to quite a few social strata: one only needs to collect 10% of the future dwelling’s cost in order to apply for a bank loan; besides, lowering interest rates in not the only way of making mortgages easier to deal with. Normally, people with modest incomes cannot afford to buy a place on a mortgage because of overpriced housing (which has been brought about by keen shortage of supply) and not because of the terms the banks offer them. Therefore, to make apartments and houses truly affordable, we need a much greater scale of housing construction,’ Ms Samuilova observed.

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