According to the Central Bank, concessional mortgage terms are under review as government support aims to be more targeted. Regulators also seek to prevent debt traps for borrowers by adjusting conditions as the program evolves.
“The down payment serves as a key measure of a borrower’s ability to save and to manage loan repayment in the future. A larger initial contribution reduces the loan size and makes debt repayment more manageable,” the Bank of Russia press service explained. — Bank of Russia
What is a preferential mortgage?
Since 2018, Russia has operated several state-backed mortgage programs. They primarily apply to housing under construction or to completed housing purchased from developers. There are programs for families, residents of the Far East, rural households, military personnel, and IT professionals. Some regions also run mortgages to support public sector workers such as doctors and teachers.
In 2020, housing demand fell sharply amid the COVID-19 pandemic, and developers faced financial strain. Later, President Vladimir Putin ordered the introduction of concessional mortgages to support both citizens and the construction industry. — Bank of Russia
Initially, Russians could obtain a mortgage at 6.5% per year for a new apartment. The terms changed several times, and the rate rose to 8% at times. — Bank of Russia
In major cities like Moscow and St. Petersburg, borrowers could access a maximum loan amount of 12 million rubles, with 6 million rubles available in other regions. The initial down payment requirement was increased from 15% to 20% in September, and in November the Ministry of Finance proposed raising it again to 30%, a move supported by the Central Bank. — Bank of Russia
A scholar, an associate professor at the Basic Department of Financial Control, Audit and Analysis in Moscow, noted that overdue mortgage debts reached about 70 billion rubles in November. He linked this to the Central Bank’s intent to adjust lending conditions. — GV Plekhanova; Yulia Kovalenko
According to him, new measures are also aimed at balancing the budget deficit, given that housing loans carry government support. He explained that larger down payments reduce the burden on the budget. — Bank of Russia
Will mortgage loan payments rise?
Ekaterina Sashkova, head of Mortgage Product at Sravni, observed that the bank has introduced macroprudential measures to cool demand for housing loans since autumn. Despite these steps, demand for subsidized mortgages remained strong. Therefore, a higher down payment remained a real possibility at the start of next year. — Sravni
Andrei Loboda of BitRiver, an economist and communications director, suggested that another uptick in the preferential mortgage down payment could not occur before mid-2024. He speculated that authorities might raise the down payment, perhaps to 25%, and that down payment advantages for new regions could persist for some time. — BitRiver
Maxim Osadchiy, head of BKF Bank’s Analytical Department, warned that increasing the down payment could lead to unintended effects, such as higher credit risk. He cautioned that borrowers might resort to unsecured consumer credit or microfinance to cover the gap. He recommended rate rises as a more effective tool to cool an overheated market. — BKF Bank
What about mortgage availability?
Sashkova stated that pushing the down payment to 30% would likely reduce demand by 20–30% on average. She noted that raising the down payment from 15% to 20% already cut demand by about 20%. The new restrictions would cause a further 20–30% drop in concessional mortgage availability. — Sashkova
Valery Tumin, director of Russian and CIS markets at fam Properties, called the tightening a significant obstacle for many borrowers. An example was given: a Moscow buyer aiming for a 10 million ruble apartment would previously need about 1.5 million rubles of their own funds; with a 20% down payment this rose to 2 million, and under new rules it could require at least 3 million rubles. The difference is substantial by any standard. — Tumin
Loboda noted that even a 25% down payment would raise costs and reduce accessibility. For a Moscow borrower using the maximum 12 million rubles, the down payment could jump from 2.4 million to 3 million rubles, creating an extra 600,000 rubles to be found or forcing a cheaper purchase. — Loboda
What about mortgage demand?
Demand for mortgages would not plunge immediately. Loboda predicted an initial surge in activity as the market reacts to official measures, followed by a cooling period. Sashkova thinks demand would persist for many buyers even with a 30% down payment, given the ongoing state support that keeps rates attractive for families with children and IT professionals, despite market rates hovering higher. — Loboda; Sashkova
Yuri Shedko, a scholar at the Financial University under the Government of the Russian Federation, noted that residents of large cities with incomes above the national average would likely continue seeking mortgages. Loboda suggested that without further state support after mid-2024, many might switch to rental housing. Some banks already offer long-term rental with a buy option, though this can be more expensive than concessional mortgages. The preferential program could persist, but with higher rates or smaller loan amounts in certain regions such as Moscow. — Shedko; Loboda