Teachers in Russia’s Far East will soon be able to take advantage of a new government-backed mortgage program that offers loans at a minimum rate. The program, called the Far Eastern Mortgage program, was announced by VTB board member Svyatoslav Ostrovsky at the Eastern Economic Forum on Monday.
The mortgage initiative will be rolled out on September 15 and will be available to employees of state and municipal educational institutions. It will apply to housing in apartment buildings and semi-detached buildings. While it primarily covers the primary market, it will also apply to the secondary market in rural settlements, single-industry towns, and the Chukotka Autonomous Region and Magadan Region.
Ostrovsky emphasized that the program will be part of the ‘Year of the Teacher and Mentor in Russia’ and stated, “In changing economic conditions, the task of banks is not just to be providers of preferential government programs, but also to strengthen them with their own projects and initiatives.”
Currently, the base mortgage rate under the state-backed plan in the Far East is 2%. However, with the new program, teachers will receive even more favorable rates. Ostrovsky expressed hope that the reduced rates will provide an additional incentive and opportunity for many teachers and education workers to improve their living conditions.
Under the program, the down payment must be at least 15% and the maximum loan amount can reach 6 million rubles ($63,000). The term of the loan is up to 20 years, allowing teachers to take their time in repaying their mortgages.
This new initiative is an expansion of VTB’s cooperation with educational institutions in Russia. Since the launch of the preferential Far Eastern Mortgage program in 2019, VTB has already provided over 10,000 loans in the region, with a total value of over $470 million. In the first eight months of 2023 alone, more than $77 million was issued.
The Far Eastern Mortgage program was initially introduced to boost population growth in the Far East and was scheduled to run until 2024. However, President Vladimir Putin extended the program until 2030 last year, highlighting its importance in the region’s development.
The implementation of this new mortgage program for teachers is another step towards achieving the goals set by the government to support education and provide affordable housing options. By offering low-rate loans, the program aims to help teachers improve their living conditions and contribute to the overall development of the Far East.
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