At the start of 2024, Russians deposited 397.4 billion rubles to repay mortgage loans ahead of schedule using personal funds. This is a notable figure reported by RBC with data from the Central Bank of Russia (CBRF). The picture shows a market where prepayments remained substantial, yet slightly cooler than in the same period a year earlier, signaling evolving consumer behavior in response to macroeconomic conditions and regulatory shifts. The annual move toward early repayments reflects both households prioritizing debt reduction and the ongoing influence of monetary policy on borrowing costs and repayment incentives across the country.
Compared with the first months of the previous year, the volume of early repayments decreased by about 10 percent. Analysts point to the panorama of rising rates in the period and the wider cost of credit as factors that tempered borrowers’ willingness to accelerate payments. The lowest level of mortgage prepayment on record in recent times occurred in the third quarter of 2022, when sanctions and economic stress helped push borrowers to adjust their repayment strategies, underscoring how external shocks can reshape households’ financial decisions over extended periods.
For the entire year 2023, Russians repaid more than 2 trillion rubles of mortgage debt ahead of schedule. This was an expansion of roughly one third over the year, illustrating a robust wave of prepayments that reflected confidence in the housing market and the desire to reduce interest costs as conditions permitted. In practical terms, borrowers who could accelerate payments did so to lower the total cost of ownership and to shorten loan durations, a move that also impacted banks by rebalancing their portfolios and liquidity positions.
From January through September, the amount of early loan repayments rose progressively, quarter by quarter. Yet toward the year’s end, a downturn emerged: the October to December period saw a 7 percent drop versus the third quarter, a shift contrary to typical year-end borrowing patterns. This deceleration hints at a cooling in consumer appetite for large early repayments as affordability constraints, seasonal budgeting needs, and changing expectations about future rate trajectories came into play for many households.
Looking back, the annual trend of higher base rates continues to shape borrower behavior. The rate increase to 16 percent set a year ago appears to be exerting a stabilizing effect on early repayments, contributing to a contraction that has persisted for a second consecutive quarter. Policy-driven rate levels often influence decisions about debt reduction, and the recent data suggests that households are balancing the urge to cut interest costs with the reality of higher monthly payments and the opportunity cost of tying up cash in prepayments.
When comparing the average amount of early repayment with the total mortgage portfolio, a more pronounced decline emerges. In the first quarter of 2023, roughly 3.1 percent of the portfolio was repaid early, while at the start of this year the figure stood at about 2.2 percent. This shift indicates a broader reallocation of resources within households and a cautious stance toward large lump-sum payments as uncertainty persists and financial plans are recalibrated in light of evolving rates and economic expectations. Early repayments remain a meaningful component of the debt landscape, but their pace has moderated as lenders adjust terms and borrowers reassess their long-term housing strategies.
Finally, the Far East and Arctic mortgage program at that time distributed support to participants. The program targeted Russian citizens who were active participants or veterans of a special military operation in Ukraine, as well as family members of those who did not return from the Northern Military District. The aim has been to provide tailored assistance within regional housing initiatives while broader national programs continue to influence the demand for mortgages and the pace of prepayments across different regions. This context helps explain regional variations in repayment patterns and the overall trajectory of mortgage activity in the country.
Earlier reports indicated that mortgage demand in new regions was under close government scrutiny, with policymakers considering how regional economic conditions and demographic factors shape the appetite for home loans. The evolving policy environment, coupled with market dynamics and international sanctions, continues to influence household decisions about when and how to repay mortgage debt ahead of schedule, shaping the debt profile of many Russian families across the country.