Today, Russians have the opportunity to purchase real estate with a mortgage, not only in rubles, but also in foreign currency. The most popular are dollars and euros.
In what currency to take a mortgage
Foreign exchange mortgages attract borrowers with lower interest rates. They can be lower by 2-5% in relation to the ruble. And since a mortgage is a long-term loan, many people believe that during its repayment they will be able to significantly save on payments. However, this assumption is wrong.
The basic principle of choosing a currency for taking out a mortgage is to take a loan only in the currency in which the borrower receives income.
The main risks for the borrower are possible currency fluctuations. The euro or dollar exchange rate may rise so significantly that it will make payments on loans in ruble terms absolutely unaffordable. And today no professional analyst can correctly predict the exchange rate movement for a period of 10-15 years.
Of course, if the mortgage currency strengthens significantly in price, you can always restructure the loan and refinance in rubles. But at the same time, you will have to pay standard commissions for reviewing a loan application, appraising a property, etc.
Therefore, if the borrower's salary is in rubles, the mortgage should also be taken in the domestic currency. This is especially true for long-term loans such as mortgages. It is also important to consider the losses incurred by the borrower when converting money from one currency to another.
But if it was decided to stop at a foreign currency mortgage, it is worth choosing a limited loan term - 5-10 years.
Features of choosing a foreign exchange mortgage
Foreign exchange mortgages in dollars and euros are the most common option. Recently, there have also been proposals for mortgages in Japanese yen or Swiss francs. But taking out such exotic loans is recommended only for those who receive salaries in this currency, because it is quite problematic to buy them and they are sold at an inflated rate.
Rates on mortgage loans in rubles start at 8.5%, thus, they are as close as possible to foreign currency loans.
In its most general form, the algorithm for choosing between a mortgage in dollars and euros is extremely simple. For those who receive income in euros, this currency is preferable for a loan. Likewise with dollar income. At the same time, the starting rates for loans in dollars and euros are today the same and range from 7, 9%.
If we take the exchange rate dynamics as the basis for the choice, then the dollar exchange rate has grown by 20.28% over 10 years in comparison with May 2004 (from 28.99 to 34.87 rubles). Whereas the euro from 34, 86 to 47, 88 at 37, 3%. Thus, for those receiving salaries in rubles, foreign currency loans would depreciate all the benefits of lower interest rates. But borrowers on dollar mortgages would have suffered less losses. It is assumed that in the future the euro will also strengthen stronger than the dollar.
