The National Bank will update the terms of eHouse: how they want to make mortgages more affordable for Ukrainians

28 March 2025 14:49

The National Bank of Ukraine (NBU) is in favor of updating the terms of the eOselya mortgage program to make it more efficient and less burdensome for the budget. This was stated by Deputy Head of the NBU Kateryna Rozhkova during the first Forum of Affordable Mortgages, "Komersant Ukrainian" reports

According to her, the current program, although successful, cannot become the basis for mass market mortgage lending.

According to her, in 2023, Ukraine began to see a revival in lending to the population.

“Since 2023, when we began to notice a revival in lending to the population, we can say that over the past year the volume of the population’s loan portfolio in the banking system has increased by almost 40%,” she said.

This is evidence of banks’ increased appetite for risk and their willingness to participate in mortgage programs.

She added: “The level of non-performing loans in the retail segment is at pre-war levels, despite the war and the loss of territory. The banks’ expertise in lending, creditworthiness assessment and work with borrowers is very high.”

Why does eOselya need to change?

Kateryna Rozhkova praised the eHouse program, calling it an excellent tool, but noted that it is not enough for the large-scale development of mortgages in Ukraine.

“So, in order for this mortgage to become massive, market-based and accessible not only to certain categories of citizens, but possibly to a wider range of citizens, we see that at the first stage of the mortgage strategy we need to talk about a certain change in the parameters of the eHouse program in order to take into account the needs of the market, in order to take into account the fiscal, budgetary, primarily financial, restrictions that our state has, so that this support program can reach a much larger number of citizens,” she emphasized.

Currently, the state acts as a direct lender, offering preferential rates of 3-7%, which puts a significant burden on the budget. At the same time, Ukraine’s banking system has excess liquidity but cannot compete with the non-market terms of the state mortgage.

Rozhkova emphasized that successful mortgage support programs in other countries work differently: the government does not lend directly, but creates conditions for market lending. If certain categories of citizens cannot afford market rates, the state compensates for the interest. This approach, according to the NBU, will allow eOselya to scale up without excessive budgetary costs.

“Many countries have mortgage support programs. This is a very important social aspect, it is a driver of economic growth, but the most successful programs are those where the state is not a direct lender. The state should create conditions for market mortgage lending, and when these conditions are more expensive for certain categories of citizens, the state should apply a mechanism to compensate interest rates,” Rozhkova explained.

What changes does the NBU propose?

The revision of eHouse aims to combine market mechanisms with state support. Rozhkova noted that Ukraine has not yet established fully market conditions, but in the medium term it is possible. However, even in five years, Ukraine is unlikely to reach rates of 4-4.5%, as in Poland, where mortgages already operate on such terms. For comparison, the current preferential rates of eHouse (3-7%) are much lower than the potential market rates.

To make the program sustainable, the NBU proposes:

To keep eHouse as a subsidized lending tool for vulnerable categories.
Develop interest compensation mechanisms for people who cannot take out market loans.
Engage banks in active competition using their liquidity.

In addition, legislative changes are needed for the program to work properly. Rozhkova singled out the adoption of a law on property valuation, a law on securitization, the implementation of the European Mortgage Directive, and the creation of a rent-to-own model. These steps should unlock the potential of the mortgage market.

Why is it important for Ukrainians?

Mortgages are not only a social tool but also a driver of economic growth.

According to Rozhkova, affordable housing lending stimulates construction, creates jobs, and supports the economy. However, Ukraine’s limited budget does not allow for the expansion of eOselya in its current form.

A transition to market conditions with partial state support could make mortgages available to a wider range of citizens, not just those who fall into the privileged categories.

What will happen to eHouse next?

The NBU does not propose to cancel the program; on the contrary, eHouse will remain an important tool in the long run. However, it needs to be adapted to the realities: to make it more flexible, cheaper for the state and more attractive to banks.

“There will definitely be a mortgage strategy and a strategy for Ukrfinhousing. We have already started working on these issues and plan to approve the relevant changes by the middle of the year at the Financial Stability Council,” Rozhkova summarized.

No specific timeframe for revising the terms has been announced yet, but the Affordable Mortgage Forum was the first step toward a broader discussion of the changes.