Attractive offers from construction companies to buy housing in installments without overpayments often hide significant additional costs. Expert in construction and renovation Dilyara Seitnurova has revealed the mechanism of hidden overpayment, which can reach 15% of the apartment's cost, reports infohub.kz.
According to the expert, the "0%" installment plan from developers actually includes a markup of 10–15% of the housing price, which is built into the cost of the apartment in advance. This markup depends on the down payment and the installment period, and in the end, the buyer overpays an amount comparable to the overpayment on a mortgage.
Seitnurova provides calculations using the example of a 60-square-meter comfort-class apartment worth 45.3 million tenge. Under the most common conditions — a 50% down payment, a 12-month term, and a 10% markup — the price rises to 49.83 million tenge, and the effective rate reaches 46.5% per annum. If the term is extended to 24 months, the monthly payment drops to 1.038 million tenge, and the rate falls to 22% per annum.
With a 30% down payment and a 24-month installment plan with a 12% markup, the monthly payment will be 1.48 million tenge, and the effective rate — 17.8%. The most advantageous option, according to the expert's calculations, is an installment plan with a 20% down payment for 36 months with a maximum markup of 15%: the effective rate will be 12.6% per annum, and the payment — 1.158 million tenge per month.
The expert emphasizes that the cost of money in an installment plan is determined by three factors: the size of the down payment, the term, and the markup, and does not depend on the price of the apartment. Thus, the most expensive installment plan by price may turn out to be the cheapest in terms of the cost of money.
Comparing installment plans with mortgages, Seitnurova notes that with a mortgage, a larger down payment and a shorter term are more beneficial, whereas an installment plan requires high monthly payments but ultimately costs less. For example, a commercial mortgage for 20 years with a 20% down payment involves a payment of about 673 thousand tenge per month and a total payout of 170 million tenge, while an installment plan for 36 months will cost 52.09 million tenge — a difference of more than 100 million tenge.
However, the expert warns of risks: installment plans are usually formalized with a preliminary sales contract for a property under construction, which does not guarantee the completion of construction. Therefore, buyers need to carefully assess their financial capabilities and consider all the nuances before choosing such a tool.