ARDFM deems 20% mortgage rate as high, creating risks for borrowers and banksEven the reduced annual effective interest rate (AEIR) for mortgage loans lowered from 25% to 20% – remains high for borrowers and threatens to increase non-performing loans, stated Madina Abylkassymova, Head of the Agency for Regulation and Development of the Financial Market (ARDFM)."Our position is that even 20% is a very high rate for mortgage loans. Mortgages are long-term, high-value loans carrying significant risks for both borrowers and banks (...). We believe mortgage loans with annual effective rates above 20% are unsustainable in the long term. They create an excessively high debt burden on borrowers," Abylkassymova told journalists on Tuesday.She noted that high mortgage rates could lead to a rise in financially vulnerable households and an increase in overdue loans within bank portfolios.Abylkassymova clarified that regulators suspended the reduction of AEIR to 20% until November 1, 2025, to allow banks time to approve all previously submitted applications and finalize contracts. However, she disagreed with banks’ claims that the 20% rate is "insufficiently high."As previously reported, a joint resolution by ARDFM and the National Bank of Kazakhstan in June lowered the maximum AEIR cap for mortgages from 25% to 20%. Subsequently, regulators paused the amendment to reduce the mortgage rate cap to 20% until November 1, 2025.Thus, until November 1, 2025, all interest rate caps remain as follows: 25% for mortgage housing loans, 46% for unsecured bank loans, 3% for collateralized bank loans, 46% for microloans issued by microfinance organizations. (ICE ALMATY)

Fonte notizia: INTERFAX