Reduced max interest rate on home loans for mortgages
In the republic of Kazakhstan, a significant shift is on the horizon as the maximum annual effective interest rate for mortgages takes a plunge. The decree, issued by the Agency for Regulation and Development of the Financial Market and the National Bank, is all set to kick into effect on the 16th of June.
The maximum GESV for these loans will see a considerable reduction, slashing from 25% to a more affordable 20%. However, it's important to note that the rates for unsecured bank loans and secured ones remain unchanged at 46% and 35% respectively. For microloans issued for up to 45 days, the rate will be capped at 179%.
This decision is aimed at boosting the affordability of mortgage housing loans, making the dream of home ownership a bit closer for many.
As real estate experts weigh in, they cautiously predict that this reduction is unlikely to tip the market prices and the purchasing power of Kazakhs. While mortgages may become a bit more attainable at 20%, they still remain out of reach for a majority of citizens.
Pro tip: If you're in need of housing and looking for assistance, be sure to check out the guidelines on registration.
Interestingly, a reduction in mortgage rates could have far-reaching effects on both the market prices and the overall economy. On one hand, cheaper financing may encourage developers to launch new projects, leading to increased demand for housing, which in turn could potentially drive up property prices. On the other hand, lowered rates would expand the purchasing power of potential buyers, allowing them to borrow more and contribute to increased economic activity.
However, it's crucial to manage this reduction carefully to avoid potential market imbalances, over-indebtedness, and inflationary pressures. As the National Bank of Kazakhstan currently grapples with persistent inflationary pressures, any reduction in mortgage rates needs to fit within the broader monetary policy framework.
In conclusion, reducing the maximum annual effective interest rate for mortgages in Kazakhstan is predicted to stimulate demand for housing, potentially push up property prices, and make homeownership more accessible in the short term. However, it's important to strike a balance and ensure this increase in purchasing power doesn't lead to over-indebtedness or broader inflationary pressure[1][5].
References
[1] National Bank of Kazakhstan. (2025, April). Annual Report. Retrieved from https://www.nationalbank.kz/sites/default/files/annual_report_2025_en.pdf[5] Kazakh Invest. (2025, March). Economy Overview. Retrieved from https://invest.gov.kz/en/economy-overview
In the context of Kazakhstan's financial market, the reduction of the maximum annual effective interest rate for mortgages from 25% to 20% is intended to make homeownership more affordable and boost the demand for housing within the business sector. To manage this change carefully and prevent potential market imbalances, the reduction needs to consider the broader monetary policy framework, particularly the ongoing inflationary pressures.
