In Russia, after the Central Bank lifted the key rate, the demand for preferential mortgages surged noticeably. In August, inquiries and consultations about government programs for new housing purchases climbed by about 40 percent. This pattern was highlighted by a major industry publication, which referenced insights from a deputy head of the mortgage department at a leading brokerage firm focused on home construction.
Industry specialists note that many Russians considering a home purchase accelerated their plans in response to the expectation that loan costs would rise further. There was a clear shift toward securing financing for newly built homes, while a portion of buyers who had previously paused their plans due to volatility in the ruble exchange rate redirected savings into real estate, particularly where government-backed mortgage programs offered favorable terms. This dynamic contributed to heightened activity in the market.
Analysts point out that while the terms of government preferential programs remained stable, traditional banking products began to diverge as lenders adjusted to the higher key rate. The expectation is that demand for loans to buy older or secondary properties could soften as banks recalibrate their offerings and pricing in response to tighter monetary conditions.
During an extraordinary session, the central bank decided to raise the key rate from 8.5 percent to 12 percent per year with the goal of curbing inflation and tempering ruble depreciation. Since August, financial institutions have initiated increases in mortgage rates, with rises of at least two percentage points becoming common. Forecasts suggest that such rate hikes will push monthly loan payments higher by roughly 13 percent and elevate the overall cost of borrowing by nearly a quarter.
Experts warn that this shift could present the main risk to government-backed preferential mortgages. The evolving rate environment creates additional considerations for borrowers seeking favorable terms through state-supported programs, as banks adjust their lending criteria and pricing models in alignment with monetary policy developments. The broader effect is a tighter housing finance landscape, where buyers must weigh the benefits of reduced upfront costs against the longer-term implications of higher financing costs.
For households contemplating a purchase, the current climate underscores the importance of comparing different financing paths, including the availability of subsidized mortgage options and the potential for rate stabilization or further moves by monetary authorities. While government programs continue to offer attractive conditions, the overall affordability of housing loans will increasingly hinge on how lenders respond to the new rate regime and how borrowers manage ongoing changes in the cost of capital.