For economic reasons
The Bank of Russia, led by Governor Elvira Nabiullina, has signaled that the current policy stance will stay in place and that a further increase in the key rate could be decided at the October board meeting.
In September, the central bank lifted the rate to 19 percent, a move that many analysts had anticipated, though forecasts varied from modest two-point increases to steeper steps. The authorities signaled caution, choosing gradual steps rather than a blitz move.
Nabiullina told the International Banking Forum that the rate was raised to 19 percent in September and that a further increase in October was within the realm of possibility.
She noted that the Bank aims to bring inflation to around 4 percent by the end of 2025.
At the same time, annual inflation could exceed the July forecast of 6.5 to 7 percent by year end 2024, according to a central bank release.
Historically, large lenders have acted quickly in response to policy signals, often lifting mortgage rates in advance of an official decision.
In September VTB again moved ahead, updating its mortgage terms on the 25th and raising the base rate by 1.5 percentage points. Mortgages for flat purchases carried an annual rate near 22 percent after discounts.
RBC explained that these steps reflected expectations of higher policy rates and the higher cost of funds for banks.
Wait or buy
Sberbank had not confirmed another hike yet, but a move in the near term cannot be ruled out. The bank tends to proceed cautiously, letting customers lock in existing terms, while broader economic forces push lenders to raise mortgage prices.
Mortgage pricing is tied to OFZ yields, with five-year maturities showing higher profitability while longer tenors drift lower.
Current mortgage programs price rates at a margin over five-year OFZ yields, typically around OFZ five-year plus five percentage points, sometimes narrowing to about three. This pattern shows a growing detachment between mortgage costs and OFZ yields, with banks adjusting loan pricing amid uncertainty about how long higher rates will endure and the quality of new borrowers.
Taken together, a quick rate cut seems unlikely in the near term. In fact, lenders may keep lifting rates, making housing loans more expensive. At the same time, government support programs remain in place for targeted borrower groups.