Mathematical Models for Calculation of the Parameters of the Bank and the Borrower in the Mortgage Lending

Abstract

The article covers the consideration of the issues of analysis and development of mathematical models to improve the efficiency of the mortgage lending system. The relevance of the study is due to the fact that the current mechanisms of mortgage lending in Russia do not correspond to global trends: by interest rates level; in terms of the volume of loans issued and other conditions. However, it is one of the main tools that allows to improve the population’s living conditions and, as a result, to release the socio-economic tension caused by this factor, as well as to attract additional input in the investment and construction sector, which in modern conditions is one of the most important problems. As a result of the research carried out, the article offers a mathematical model for calculating the parameters of the bank and the borrower, in order to form the most acceptable conditions for the loan. In the mathematical model, such parameters of the borrower and the lender as the price of the apartment, the percentage of the down payment from its price, the mortgage loan rate, the total debt and the loan term, as well as the share of the borrower's income allocated to monthly payments are interconnected. This model will allow the bank to determine the most suitable loan conditions regarding the payment amount, term, and available credit limit, and the borrower to calculate the parameters of the loan in order to make an informed decision on attracting it. All this, in the end, will allow banks to reduce the level of risk on issued mortgage loans, and the borrower — confidence in the ability to pay off the mortgage loan.