The Modelling of Mortgage Lending in the Residential Real Estate Market

The residential real estate mortgage lending plays extremely important economic and social functions. Its development contributes to a competitive economy of the state and its stabilization. Taking this into account, it is important to reveal which factors and to what extent affect the volume of mortgage loans. This study presents the results of empirical research of the relationship of macroeconomic factors and the volume of mortgage lending in the residential real estate market in Russia. Moreover, it determines the possibilities of extension the volume through the various models of mortgage lending. Based on the regression analysis of the data on housing loans that were given in the period from the first half of 2007 to the first half of 2015 by 43 banks, it was found that inflation, exchange rate, unemployment rate, the crucial rate of the Bank of Russia has a negative effect on the dependent variable – the volume of mortgage lending, while the GDP showed a positive correlation. Moreover, it was found that the amount of new issued loans depends on the previous period. The evaluation of the possibility of increasing the real estate lending, based on the Gross Debt Service ratio (GDS), demonstrated a rise in the pool of potential borrowers of the bank in the application of the model of balanced autonomy. It turned out that the use of the German model reduces the customer's minimum monthly income, needed to take a loan, by 40%. The results and findings may be useful for banks to implement credit policies for granting loans secured by real estate.