According to previously published suggestions of the Bank of Russia, insurance of risks of life, health, and the apartment will become mandatory, its amount will be reflected in the total cost of the mortgage. Now insurance is acquired by the borrower, and the agent is often a Bank, leaving a larger share of the insurance premium. In the current system, the borrowers are strongly overpay for mortgage insurance, it follows from the concept: in 2019, the payments amounted to only 3% of the premiums collected on the mortgage insurance and 15% from insurance premiums of life and health.
at the stage of choosing a Bank, the borrower, typically focuses on interest rate and total cost of the loan will know only after the purchase of insurance and the payment of costs for documents, Bank notes of Russia. According to him, the full value is issued in 2019 mortgage loans exceeded the interest rates on them on average by 1.45 percentage points, of which 0.74 PP. – insurance costs.
According to Bank of Russia estimates, if proposed in the concept approach was previously used, full mortgage cost in 2019 would have been lower by 0.15 to 0.67 percentage points.
“the Key interested parties of mortgage insurance is the Bank-creditor, – it is noted in the concept. Is indirectly confirmed by the low level of insurance penetration of life and health and property insurance, not connected with mortgage loan agreement, and the frequent failure of borrowers to purchase insurance when insurance costs exceed the savings on interest on the loan.”
Therefore, the Bank offers such difficult for the ordinary citizen, the steps of issuing an insurance policy, as the choice of insurer, talks about the price of the policy and the insurance agreement, to pass on to the Bank.
“This will make it easier for borrowers to compare the cost of mortgages, as the cost of insurance will immediately be laid by the Bank in the interest rate on the loan, – stated in the concept. – In addition, it is expected that the conclusion of the insurance contract by the Bank, not the borrower will lead to cheaper insurance contract, as the Bank having a stronger negotiating position and probably insuring a pool of borrowers will be able to negotiate lower insurance premiums. Thus, the implementation of the proposals will probably lead to a decrease in the full cost of a mortgage loan for the borrower”.
