The mortgage has floated
Demand for mortgage loans with the floating rate year from a year grows. Correctly having chosen an index to which the rate, term and credit currency is adhered, the client can essentially save on percent. But the incorrect choice is fraught with a considerable overpayment. How not to sink at financial ocean, having chosen the credit with the floating rate, our correspondent understood.
Interest to the floating rate directly depends on an economic situation, experts consider. But consider on - to a miscellaneous. If to look from the point of view of banks during crisis times the floating rate can protect their financial well-being. As analyst IFK " explains; Solid " Elena Yushkov, credits with the floating interest rate it is reaction of banks to an interdiction to change the fixed rates under already given out credits. In case of the crisis phenomena in economy credits with the floating rate it is more preferable, as allow to lower negative effect of recession. Such credits partially relieve bank of risk of growth of interest rates as at increase of rates the bank does not lose a part of profit from - for impossibility to use money resources.
benefit of the floating rate for the borrower consists that the client has an opportunity to save. However, this possibility is connected with risks: the borrower can obtain the credit under smaller percent on comparison with srednerynochnym value of the rate, however its rate under the credit can be raised after situation change in the market as the floating rate is defined on the basis of the uniform standard index.
" in 2008 floating interest rates with confidence in steady growth of their popularity have declared many banks. Really, for banks it there was a perspective product in conditions when possibilities and tools for protection of their interests and preservation of incomes on enough wide intervals of time were extremely ogranichenny, The chief of the department on work with financial tools of the company " remembers; Glavmosstroy - real estate " Alexander Serebryakov. before crisis demand for such credit conditions was mainly at clients - the experimenters which share was always insignificant. And before crisis their share was measured by units of percent, and after crisis has essentially decreased ".
On Elena Jushkovoj`s supervision, the quantity of credits with the floating rate changes depending on behaviour of indexes. When they decrease, quantity of the borrowers, wishing to be financed under these programs, grows. Today with the floating rate demand for the program, for example, grows in dollars because LIBOR the last half a year stably decreased. As a result the rate under such credits has fallen below the fixed.
on the other hand as Alexander Osin explains, group economist UK " finam management " As the borrower himself bears risks on change of cost of a loan growth of investment, inflationary risks, demand for such products is reduced. As as soon as the economic situation worsens, rates grow at once, and interest of the borrower to floating rates falls.
Floating rates can be adhered to several indicators.
" for definition of the floating rate in roubles the indicator of cost of financial resources MosPrime (Moscow Prime Offered Rate) which pays off National currency association, and #150 usually is used; Elena Yushkov explains. credits in dollars are adhered to the London interbank rate of offer LIBOR (London Interbank Offered Rate). For interest rate definition in euro the index of the European interbank rate of offer EURIBOR (European Interbank Offered Rate) is used. Thus, the floating rate develops of value of an index and the fixed percent. Usually for LIBOR the fixed percent makes 4,5 - 6 %, for MosPrime 6 - 7 %. The period of calculation of the rate is underlined in the contract ".
the Majority of credit programs with floating rates assumes the period of fixing for the term from one year till five years. There are banks which suggest to fix the rate for the term up to ten years, then the fixed part +5 - 6 %
According to Alexey Shlenova, the general director of the company " MIEL - Brokeridzh " a number of the most reliable banks, therefore an index participates in definition MosPrime is the most transparent and exact among similar. Banks bring the quotations in system " Rejter " till 11:45 Moscow time. From among the declared rates cut the lowest and the highest, and from the remained count average arithmetic value which is appropriated to rate MosPrime Rate.
LIBOR it is defined by the British bank association since 1985 daily at 11:00 on the West European time on the basis of the given first class banks. LIBOR it is calculated for different currencies (euro, the Australian dollar, US dollar, Canadian dollar, the New Zealand dollar, the Danish crone, pound sterling, the Swedish crone, the Swiss franc, Japanese yen) and for different terms: from one day till 12 months.
if the rouble credit with the floating rate the base rate will be MosPrime is necessary to the borrower; if the credit in foreign currency the base rate will be LIBOR undertakes. To the base rate the fixed indicator established by a creditor bank increases. Accordingly, at growth of indexes the percent on the credit will increase also.
" Thus, at the fixed interest rate, for example 10 % annual, the borrower pays for use of bank money on a flat fare during all period of validity of the credit contract, Alexey Shlenov speaks. At the floating interest rate to a base indicator (index MosPrime or LIBOR) increases the fixed indicator, for example 5 %. The floating rate under the rouble credit will change depending on change of a base indicator of times in three months, under the credit in foreign currency once a year ".
the Example of payments under the credit with the floating rate adhered to the rate of refinancing of the Central Bank, is resulted by Alexander Osin: " the Rate of refinancing of Bank of Russia is attached to inflation. Over the last ten years on growth of inflation the Central Bank rate deviates gradually upwards a rate of inflation on 2 - 4 % annual. For example, at inflation acceleration for two years on 2 % the refinancing rate will grow also approximately, at least on 2 %, the floating rate of bank will grow approximately on 2,5 %. As a result at the initial rate of the credit of 14 %, the sum of the credit of 3 million rbl. and initial percentage payments in 420 thousand rbl. for a year the borrower will be urged to pay already 495 thousand rbl. a year on percent for a mortgage ".
Marina Marutina, the chief executive " SKM Rielti " (holding " SKM Groups ") Results other example: " After the beginning of financial crisis of 2008 in Russia indicator MosPrime has grown several times (from 6,88 % to 28 %) therefore payments on mortgage loans in roubles have grown three times, and the rate on a mortgage reached 40 % for the majority of Russians it there was a catastrophic situation ".
Give to the credit term
So costs or it is not necessary to take the credit under the floating rate? Alexander Osin considers that if there is a speech about a mortgage for ten years, it is excessively risky variant of attraction of a loan as the majority of anti-recessionary measures is created by the raised inflationary risks in the long-term period. Thus floating and fixed rates differ on 1 - 3 % annual, even small acceleration of inflation is capable to call increase in market rates and cost of service of a debt on the big size.
for short-term loans within one year Floating rates can bring to the borrower reduction of expenses on debt service on 1 - 2 % annual at possible decrease in market settlement rouble rates the next quarters after inflation and against gradual softening of a monetary policy of the Central Bank. But the investor will be urged to bear the external risks connected with a situation in the western markets of crediting. These risks also are quite capable to be reduced under influence of a policy of the authorities and market factors the next quarters, but they cannot be underestimated.
but to estimate and the more so predict similar risks professionals can. And to the ordinary borrower, Alexander Serebryakov is assured, will be independent to define difficultly expediency of attraction of the credit with such conditions if only its incomes do not depend also on indexes LIBOR and MosPrime. " Usually with the floating rate the people well familiar with financial sphere (employees of banks, the financial organisations) and having possibility to predict behaviour of indexes " used credits; he marks.
to protect the money from the unpredictable market, general director NBIK of Evgenie Taubkina advises to choose a mortgage product with the established minimum and maximum value of the interest rate, for example from 11,5 % to 20 %. Thus, in case of sharp growth, for example, the rate of refinancing of the Central Bank of the Russian Federation percent on the credit will not exceed the established level.
on idea if the index to which the floating rate is adhered, grows, the borrower remains for nothing. And if decreases that in a prize. But it in the theory. In practice banks are protected from too strong falling of indexes, and borrowers have possibility refinansirovat the credit if indexes strongly rise.
As Alexander Osin explains, the minimum at rates LIBOR and ERIBOR is not present basically: if they theoretically leave in deeply minus area, bank, besides theoretically, should pay itself to the borrower for the given out credit. So roads will be money which it from the borrower will receive in this case. But it is very abstract model, at similar succession of events macroeconomic, investment recession, a credibility gap in the credit market and the subsequent credit shock, sharp growth of rates after their initial essential decrease which have called a new wave of crisis is probable.
in practice, the head of department of a mortgage and company credits " reminds; NDV - Real estate " Andrey Vladykin if the total rate under the credit decreases to level less than the established rate of refinancing of the Central Bank the borrower is obliged to pay the tax at a rate of 13 % on the formed benefit.
Return more soon
If, despite risks, all of you have dared at the credit with the floating rate, it is necessary to listen to advice of experts.
according to Elena Jushkovoj, it is necessary to take the credit which it will be possible to return ahead of schedule if the interest rate strongly grows. Alexey Shlenov considers that credits with the floating interest rate are favourable in the market of decreasing interest rates and for the term of the credit no more than five years. The same opinion and Marina Marutina: " Most favourably credits for short term: in this case 0,5 - 1 % can be won. And also credits during the postcrisis period when in rate banks are lifted to a maximum as then gradually rates start to decrease " she speaks.
Alexander Osin at all does not recommend to use floating rates on intermediate term and long-term prospect, and Elena Yushkov considers that today it is favourable to choose programs with the floating rate in dollars because LIBOR the last half a year stably decreased. As a result the rate under such credits has fallen below the fixed. But crediting term should not exceed five years as to predict behaviour of an index for the big period it is almost impossible.
" At a choice of the credit with the floating interest rate it is necessary to define real term of using the credit (not registered in the credit contract, and during what the borrower plans to extinguish the credit) and risks which are comprehensible to you, Alexey Shlenov explains. The more term of the credit with the floating rate, the above risks of the borrower. And in a situation of increase of level of the rate in the crediting market in a case with the fixed rate the borrower will pay less borrower with the floating interest rate which will be increased ".
What to do to the borrower if the indicator to which the rate is adhered, has strongly grown? Experts offer one exit: refinansirovatsja in other bank in a rouble equivalent.
" to translate the credit with the floating rate on credit with the fixed rate it is possible by means of refinancing, tells Evgenie Taubkina. the Borrower will in addition incur expenses according to object of pledge (about 5 thousand rbl.) Expenses on complex mortgage insurance (0,6 - 1 % from the debts rest under the credit in a year), expenses on payment of the commission of bank for demand consideration, delivery of money resources, transfer (1 - 1,5 % from the credit sum) ".
As a last resort Alexander Osin suggests to be converted into court with claims for legality of the contract under the credit with the floating rate. According to Rospotrebnadzora, the floating rate under the credit contradicts the law on protection of the rights of consumers, namely the right of the client to know a credit overall cost. At the variable rate to calculate a credit overall cost it is almost impossible and the floating rate still can be regarded as unilateral change of treaty provisions. Judicial disputes on legality of credits with variable rates go for a long time, however the Supreme Arbitration Court (YOU) considers such credits lawful. According to VASa, the main thing conditions of change of rates should be accurately registered in the contract. Representatives of banks in case of judicial hearings refer to the international experience of application of the variable rate at mortgage registration.
an interesting combination
to More careful borrowers experts recommend to pay attention to credits with the combined rate. " the combined rates differ from floating subjects that they are not adhered to indexes from the crediting beginning. As a rule, in the combined rates during from one till ten years percent on the credit are fixed, after certain term the rate becomes floating, that is becomes attached to this or that index, Konstantin Shibetsky, the director of mortgage branch GK MITS tells. Pluses of the combined credits consist that the rate part (the fixed part) under condition of registration of the credit for small term will be more low, than in a usual mortgage loan with the fixed rate. Minuses can arise when the credit is paid long, and in payment of the credit the index to which the combined rate is adhered, sharply increases, accordingly, the borrower can get to a situation of increase in final percent on the credit ".
As Elena Yushkov explains, such credit gives the chance to observe of behaviour of a floating component and in case of considerable volatilnosti refinansirovat the credit with rate change on the fixed. In this time the borrower can carry out partial preschedule repayment of the credit, thus the rate will be fixed at level convenient for it. However at smaller riskiness under such credits of the rate, as a rule, above, than under credits with the floating rate.
as it became known " to the House " the mortgage product with the combined rate plans to deduce in the near future for market AIZHK. " Kombinirovannost consists that after delivery of the credit the rate is fixed for certain term, and then starts to float depending on the certain indicator. Thus for the borrower there will be a right to fix the rate and for all term of crediting, Marina Malajchik, chief executive AIZHK on innovations speaks. It is supposed that in period instability borrowers will choose last option, that is to fix the rate for all term of crediting (as well as becomes now). And in stability, considering that actual term of a mortgage loan taking into account preschedule repayment makes seven - eight years the combined products with rate fixing, for example, on five - seven years as such credits assume lower rate ", to the contrary, will be in demand;.