What is an “Arctic mortgage” – Kommersant
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VTB was the first Russian bank to begin accepting applications for an “Arctic mortgage.” Borrowers can apply for a home loan at 2%, transactions will begin in early November. How this program came about and what its conditions are is in the Kommersant reference.
How the “Arctic Mortgage” program came about
In July 2023, Vladimir Putin supported the idea of introducing an “Arctic mortgage” for young families at 2%. It is assumed that the program will operate until 2030 and will apply only to the purchase of primary housing. Such a measure should stop the outflow of population from regions located in the Arctic zone.
On August 24, the President instructed to adjust the Far Eastern Mortgage program by November 1 for its application in the Arctic regions of the Russian Federation. Currently, this program allows borrowers to obtain a mortgage loan at a rate of no more than 2% per annum for the entire loan term when purchasing or constructing residential premises in the Far Eastern Federal District.
What territories are included in the Arctic zone
The Arctic zone of Russia includes the Murmansk region, the Nenets Autonomous Okrug, the Chukotka Autonomous Okrug, the Yamalo-Nenets Autonomous Okrug, as well as individual regions and municipalities of Komi, Karelia, Yakutia, the Arkhangelsk region and the Krasnoyarsk Territory.
According to Rosstat, about 2.5 million people live in the Arctic zone. Large cities in this belt are Arkhangelsk (about 350 thousand people), Murmansk (300 thousand), Severodvinsk and Norilsk (180 thousand people each). According to the latest census, the average household in these regions, as indeed throughout the country, consists of 2.2 people. Thus, about 1.1 million families could live in the Arctic.
What conditions does VTB offer?
The bank will begin conducting the first transactions with “Arctic mortgages” in November after the government decree has been signed and entered into force. Loan applications will be available through partners, the bank’s website and offices.
The implementation of the “Arctic mortgage” is supported by the Far East and Arctic Development Corporation. The conditions of the “Arctic” program of preferential housing lending will be identical to the parameters of the “Far Eastern mortgage”:
— the down payment must be at least 20% of the cost of the purchased property;
— maximum loan size — 6 million rubles;
— the maximum loan term is no more than 20 years.
At the first stage, clients can apply for an “Arctic mortgage” at the VTB contact center. In early November, applications for loans will become available through partners, the bank’s website and offices.
Borrowers will be able to receive funds from VTB to purchase apartments and townhouses on the primary market. In rural settlements and single-industry towns, it is possible to purchase secondary properties. At the same time, the cost of one square meter of the acquired object should not exceed the average market indicator for the corresponding subject, determined by the Ministry of Construction of the Russian Federation on the date of conclusion of the loan agreement.
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