Advancing Mortgage Lending in Ukraine
The National Bank of Ukraine (NBU) is taking an active role in developing the country's mortgage market through a new Strategy and legislative reforms. NBU officials have highlighted several factors currently constraining the mortgage lending sector and provided comparative data with European Union nations. This Strategy outlines specific actions designed to improve the situation.
At the First Forum on Affordable Mortgage 2026, First Deputy Governor of the NBU, Serhii Nikolaichuk, emphasized that mortgage development is a long-term endeavor, critically dependent on macroeconomic and financial stability, as well as a predictable legal environment. He identified key obstacles hindering the market's growth:
- The negative legacy of the 2007–2008 financial crisis;
- Insufficient legislative and judicial practice;
- High risks due to inadequate construction oversight;
- The consequences of the full-scale war.
Currently, mortgage loans in Ukraine account for less than 1% of banks' gross assets, whereas in EU countries this figure averages 14%, ranging from 4% to 38% depending on the nation. Mortgages make up less than 15% of the retail portfolios of Ukrainian banks, compared to at least 50% in some neighboring countries. Pervin Dadashova, Director of the NBU's Financial Stability Department, stated that banks are prepared to issue more mortgage loans, having sufficient capital and liquidity. The Ukrainian mortgage market remains significantly underdeveloped compared to European standards, indicating substantial room for growth.
Planned Measures to Boost Mortgage Lending
The Mortgage Lending Development Strategy includes a series of measures, such as:
- Legislative support for the effective satisfaction of creditor claims;
- Implementation of the EU Mortgage Credit Directive (2014/17/EU) regarding interest rate calculation, information disclosure, and handling of non-performing loans;
- Improving oversight and control of construction financing;
- Introducing European standards for property valuation;
- Defining conditions for issuing covered bonds and securitization;
- Updating the state mortgage support model by introducing compensation mechanisms.
These steps aim to create more favorable conditions for the expansion of mortgage lending in Ukraine.
The launch of the NBU's new Strategy could significantly impact Ukraine's mortgage market, particularly in making housing more accessible. The comparison with EU nations reveals considerable growth potential, provided a stable legal environment is secured and risks associated with construction financing are reduced. Success in this area could also stimulate broader economic growth by revitalizing the construction sector and improving living standards for the population.
As the National Bank of Ukraine implements its new mortgage strategy, the broader financial landscape is also evolving. Recent developments in the Ukrainian insurance sector reveal a significant surge in assets, highlighting key areas for potential growth. This interconnectedness between mortgage lending and insurance underscores the importance of a robust financial environment for borrowers.