Mortgages for many citizens of our country is the only option to purchase their living space. It is considered a long-term banking product, which is associated with many risks. Usually a mortgage is issued for 10-15 years. The maximum repayment period in each bank is different. You must select the appropriate period to fully pay the mortgage without delay.
The concept
What is a mortgage term? This is the approved time period during which the client must pay the cost of housing with interest. Such information is indicated in the loan agreement. The client can independently choose the period during which the mortgage will be issued. The maximum maturity is usually quite long.
According to banking rules, the shorter the period, the less the overpayment. Short-term payments are large enough, which creates a risk of default if the borrower has material difficulties. Even with a stable income, you should be safe, that is, take a loan for a long period. If there is enough money, then you can pay the mortgage ahead of schedule, saving on interest.
What do banks offer?
If you need to get housing loans, you should know how much Russian banks provide loans. What is the maximum mortgage term in Sberbank? It is equal to 30 years. Moreover, it is installed on almost all programs. If you choose the maximum mortgage term in Sberbank, and also pay without early repayment, then the overpayment will be large. Therefore, you should think carefully before registration.
Other banks also set a maximum mortgage term. VTB 24 offers to issue housing loans up to 50 years. Not every lending institution offers such conditions. Programs are designed for young professionals and young parents aged 25-35 years, because they help to get the amount to buy real estate at a favorable rate.
What is the maximum mortgage term in other banks? Other institutions offer a loan up to 30-35 years. Raiffeisenbank and Promsvyazbank also issue mortgages. The maximum maturity there is 25 years. At Rosselkhozbank and Gazprombank it is 30 years.
Bets
Depending on the term, the rate may vary. In Russian banks, it ranges from 11 to 16%. Its size will be larger if there is no down payment. There are also real estate programs that require a minimum of documents. Then the rate can be from 18%. With participation in government programs it will be possible to get a mortgage at a low interest rate of 8-14%.
Requirements
To apply for a mortgage, you must meet some requirements:
- age from 21 years;
- citizenship of the Russian Federation;
- availability of official income;
- registration before retirement age;
- The period of payment of the last installment is not later than 75 years.
Requirements may vary in each bank. Sometimes you need to confirm the experience of 6 months at the last job. If the client has real estate, this will help to arrange a mortgage. The property is used as collateral.
An important requirement of banks is a positive credit history. If loans were previously issued but not paid within the prescribed period, then there may be a refusal. The absence of such a story may also lead to rejection of the application. It is often required to have a guarantor, so that in case of non-payment of the obligation passed to him.
Whatever time period is chosen, for many programs you need to pay a down payment. It can be within 10-25% of the price of real estate. Often you need to have a certain level of income, for example from 25 thousand rubles. The higher the salary level, the higher the chances of obtaining a mortgage and the greater the amount issued. Other types of income are also taken into account: from business, part-time jobs, renting out real estate.
Minimum term
Mortgage loans are issued for a period of 1 year. In practice, an annual loan is almost never applied. The reasons include:
- large payments;
- high stakes;
- providing a money back guarantee.
If there is a constant and large income, then to get the missing amount, you can take a consumer loan. The disadvantage of a short-term contract is the difficulty of regulating the schedule and the use of early payment. The borrower needs to pay large amounts every month.
Customers should consider:
- income risk;
- probability of job loss;
- additional expenses;
- lack of revenue growth;
- inflation.
In these circumstances, it is difficult to make payments. Therefore, this should be taken into account when drawing up the contract. Violation of the payment schedule will affect the credit history, which is why it is unlikely that there will be approval of applications in the future. To reduce the risk, banks offer to arrange insurance.
What time period to choose?
This question is of interest to many borrowers. The average period is 10-15 years. As can be seen from the statistics, this is enough to pay the loan. Compared to Western and American customers who pay a long-term mortgage, Russians prefer to get rid of debt faster. The reasons are overpayments - in the USA the rate is 1-2%, and in Russia the figure is 12-15%, so for over 30 years large overpayments are obtained. This is different in different countries mortgages.
The maximum repayment period allows the borrower to choose the desired period. In doing so, the following tips should be considered:
- the risk of delay in the short term is high if the financial situation worsens;
- choosing a long period, the loan can be paid ahead of schedule in installments, reducing the total overpayment;
- prepayment is now carried out in most banks without penalties and commissions.
Overpayment at different dates
It turns out that the maximum mortgage term in Russia in each bank is different. If you choose a longer period, then the overpayment will be greater. For example, if you get a loan of 1 million rubles for 5 years at 13%, then the overpayment will be 360,000 rubles.
When the contract is drawn up for 15 years, the overpayment will be 1.3 million rubles, and the rate of 13.5%. As a result, getting a mortgage is better for a shorter period. In this case, you must take into account your financial situation before a mortgage is issued. The maximum maturity can be chosen, but you need to try to pay ahead of schedule.
Advance payment
It is better to pay ahead of schedule at the beginning of the term when interest is calculated. In this case, you need to reduce the amount of the main debt, since interest is accrued on the balance. In the second half of the repayment, early payment will not be so noticeable.
If it is known that there will be early repayment, for example, after receiving maternity capital or applying for a subsidy to a young family, it is advisable to apply for a short-term mortgage. The due date must be set on the basis of real financial situation.
Change payment schedule
Most of the interest is accrued at the beginning of registration, and then the main debt is paid. Russian banks usually issue annuity payments. First paid interest, and then debt. If prepayment is made, the amount of the debt changes. With partial payment, the payment schedule changes.
Typically, customers are invited to:
- reduction of the loan term, but the payment remains the same
- reduce payment, leaving the number of months.
With early payment, which is more profitable - reducing the term or amount? In the first case, the monthly load is not reduced, and interest will be less due to the short period. The second option involves reducing monthly payments.
When is a shorter term advantageous?
Due to the early payment of 50-100 thousand rubles, the period is reduced by several months. If you calculate everything on a loan calculator, then with a single early repayment, a reduction in the term is beneficial. Since the payment amount will be the same, the overpayment will become less.
Experts advise to issue a mortgage for a maximum period, and if possible make payments ahead of schedule. This will save housing, even if a little overpaying. Determine how best to pay the mortgage, ahead of schedule or not, should be based on your situation. Inflation needs to be considered, how money depreciates. With a high rate, it is recommended not to pay the loan ahead of schedule, but to purchase goods.
When is it better to pay ahead of schedule?
If the mortgage is registered for a long period, it is better to choose an early repayment in the first year. This will save a lot. If there is no extra money for payments, then you should pay off the mortgage as the situation allows and the agreement with the bank. For example, Sberbank establishes that early payment is possible 3 months after the first payment, since it is not beneficial for quick repayment. Other banks may have their own requirements. But the faster you pay the debt, the more you will save on interest.