Russians who want to get a mortgage with a down payment of 15 to 30 percent will have more difficulty in obtaining a loan as of October 1. In addition, the situation will become even more difficult for those who have a debt burden of 50 percent or more and apply for a loan with a 20 to 30 percent down payment. This opinion was expressed by Sovcombank’s chief analyst Natalya Vashchelyuk in a conversation with socialbites.ca, commenting on the introduction of prohibitive mortgage surcharges by the Central Bank of the Russian Federation from October 1.
“Loans with down payments below 10 percent were not common in the market, so raising risk rates to deterrently high levels would have little impact on issuances. Probably more important will be the tightening of regulations in the credit sector with 15% to 30% down payment,” the analyst said.
According to him, risk rates will increase for borrowers with a debt burden of more than 50 percent in the segment with a 20 to 30 percent down payment, which can already seriously affect mortgage loans.
“Banks will probably try to attract customers for mortgage loans with a down payment of more than 30% and a debt load of less than 70%, which are not affected by the increase in risk rates,” Vashchelyuk said.
Buyers will likely have to either postpone purchases or opt for cheaper properties, the official added.
The Central Bank has been applying a macroprudential premium for housing loans since 2019: The bank must evaluate the risk level when granting loans and create additional capital accordingly. The higher the premiums, the more likely capital reserve banks will approve loans with certain characteristics. As of October 1, the Central Bank is increasing housing loan premiums to exorbitant levels. For example, premiums for housing loans with down payments below 10 percent will increase from 1.5 to 9 percent. For loans with 15 percent to 20 percent down payment, there will be a premium of 1 to 4 percent. Levels 1 through 3 will have contributions of 20% to 30% and premiums for loans where the borrower’s debt burden is 50%.
Previously happened We know what happened with Russians’ mortgage demand in September.