Home  Journals  Finance and Credit  9(489) - 2012 March

Development of the mortgage lending system as an instrument of individuals’ housing problem’s solution

Available online: 21 February 2012

Subject Heading: Mortgage

JEL Classification: 

In the paper an expanded system of mortgage loan affordability in the system of mortgage lending of individuals is given. The dynamic of mortgage lending key indicators during 2009-2011 is examined; the house building market in post-crisis period is studied; the mortgage loan characteristics that define its affordability for individuals are estimated. The interest rate variation was selected as a factor parameter of mortgage lending affordability for individuals. The ratio «payment to income» (P/I) as a basic indicator of mortgage loan affordability in the system of mortgage lending is specified as more preferable than housing price to income ratio. The indicator analysis is examined in the interval between existing level and level of 5-6% acceptable in international practice. The growth of share of individuals able to purchase property with own or borrowed means is estimated.

Keywords: mortgage lending system, mortgage loan market, house building market, affordability, borrower, annuity, housing price to income ratio, P/I ratio

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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