In the middle of summer 2025, concessional mortgages at a rate of 12% may appear in Russia for teachers, doctors and other categories of civil servants. Senator Olga Epifanova, Arbitration Director of the Ministry of Justice of the Russian Federation, reported this to socialbites.ca.
“For now, this is a draft amendment to the government decision. In this case the flat rate could be 12%. According to the plan, the difference with the key rate will have to be covered from the budget. The senator noted that such a program would operate in an experimental mode until 2027, after which the government may decide to continue it.
In addition, according to Epifanova, new preferential mortgage programs in Russia, which the authorities want to associate with the lists of the Ministry of Industry and Trade, may become operational before the first half of next year. The senator explained that this could affect the space and defense industry, which are the most priority and critical sectors of science and industry.
In addition, Epifanova allowed the revision of the “Rural Mortgage” program: the program could be narrowed even more to exclude the possibility of purchasing housing near large cities. He cited economists’ predictions that, given the high interest rate (21%) and rising costs, it is more appropriate for the government to service mortgage loans that have already been made rather than issuing new loans.
The senator added that the “Standard on the Protection of Rights and Legitimate Interests of Mortgage Borrowers” will come into force in Russia from January 2025. In his view, the new mortgage standard suggests that banks will use escrow accounts more frequently and won’t get rewards from developers for lowering loan rates. Epifanova explained that in this way the problem of artificial inflation of housing costs will be solved. In addition, the senator noted that from the beginning of the new year, the regulatory body will have the opportunity to impose macroprudential restrictions on mortgage lending in order to protect banks from potential unscrupulous borrowers and reduce the growth of the debt burden of citizens.
In Russia, concessional mortgages at a rate of 8 percent have been abolished as of July 1, 2024. The country currently has “Family Mortgage” (6%), IT Mortgage (up to 6%), “Far East and Arctic Mortgage” (2%), “Rural Mortgage” (3%) and “Military Mortgage”. (conditions depend on the specific bank).
It was previously known how many Russians there were overpayment for a mortgage.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.