Expert opinion

Mortgage rates in Ukraine have never been stable—they have constantly changed under the influence of a number of economic and political factors. Despite complex challenges, the mortgage lending market is gradually evolving—Ukrainians now have access to housing at significantly lower rates than even 5–10 years ago.

This is stated in an analytical article by the Center for Economic Research and Forecasting “Financial Pulse.”

"Mortgage rates are a kind of indicator of the overall state of the economy. They depend not only on the NBU's discount rate, but also on the cost of resources for banks, inflation, demand for loans, the level of competition, the exchange rate, and many other factors," explains Dilara Mustafayeva, head of the analytical department at Financial Pulse.

According to the NBU, the weighted average mortgage rate in Ukraine in 2006–2021 ranged from 11.8% to 20.6%. The average for this period was 16.2%.

The highest rate — 20.6% — was recorded in 2009, against the backdrop of the economic crisis, high inflation, and the rapid rise of the dollar.

“At that time, Ukrainians invested heavily in housing amid the collapse of the hryvnia and a lack of trust in banks. Banks, in turn, tried to meet demand by offering loans even with minimal down payments. This led to increased risks and interest rates,” Mustafaeva notes.

In 2015–2016, the market showed signs of stabilization: weighted average rates fell to 11.8%–12.4%. But in 2017, due to currency restrictions and the conversion of loans into hryvnia, the rate rose again — to 17.4%.

The real breakthrough came after 2022, when the state program “єОселя” was launched. According to Dilyara Mustafayeva, it was this program that made mortgages truly accessible to a wide range of citizens.

“The ”єОселя" program radically changed the situation on the market. First, it made it possible to obtain loans at 3–7% per annum. Second, it gave impetus to the primary real estate market. And third, it showed how the state can effectively cooperate with banks to solve a socially important problem — providing housing," the expert notes.

In 2022, the weighted average rate fell to 8.6%, in 2023 to 9.4%, and in 2024 to 8.8%. In addition, in 2024, the “єОселя” program was reoriented to support the primary market — that is, housing from developers.

“According to official data, every second mortgage within the ‘єОселя’ program is already being issued for primary housing. This is extremely important in wartime, when more than 13% of the housing stock has been destroyed and 3 million Ukrainians live in damaged housing,” emphasizes Dilyara Mustafayeva.

The construction industry is also seeing positive trends. By the end of 2024, the volume of housing commissioned had grown by 32% and reached 85% of the pre-war level.

"A mortgage is not just about access to your own home. It is an engine for the economy that drives related industries, creates jobs, and generates tax revenues. And we are already seeing how properly configured state support has a multiplier effect — every hryvnia invested returns in the form of GDP growth," Mustafaeva concludes.

Reference:

The public organization “Center for Economic Research and Forecasting ”Financial Pulse" was established on March 2, 2015, with the aim of uniting the efforts of participants and experts in the Ukrainian financial market for its development and improvement.

The Center's activities will contribute to the achievement of the following goals:

• Improving the quality of the regulatory framework governing the financial market and eliminating regulatory problems that hinder its full development
• Increasing the transparency of financial institutions
• Developing new market instruments and mechanisms, including through the introduction of best international practices
• Improving the financial literacy of the population
• Promoting economic reforms, including through financial decentralization
• Promoting the development of entrepreneurship, etc.