The Central Bank to tighten rules for issuing mortgages again: what will change for borrowers from April

“The Bank of Russia seeks to quickly eliminate imbalances in retail lending”

From 1 April 2025, the Bank of Russia will have the right to establish quantitative restrictions on the issuance of mortgage loans. At the initial stage, these restrictions will apply to the most risky borrowers. We are talking about those whose debt obligations make up more than 80% of their income, and the down payment is less than 20%.

Representatives of the Bank of Russia noted that, if necessary, they will use this tool to control the indicators of the population's indebtedness. The problem is that the increase in interest rates in 2024 was offset by an increase in real income only partially, so the debt burden indicator on average in the banking system showed an upward trend.

The cooling mortgage market while maintaining high housing prices is forcing developers and banks to resort to tricks, for example, to issue mortgages with a lower down payment. The Bank of Russia sees risks to financial stability in the growth of such loans, so it discourages “overheated” mortgages with increased risk characteristics — high debt burden and low down payment. But at the same time, the Central Bank of the Russian Federation supports targeted housing affordability support programmes.

The main reason for the general decline in mortgage issuance is a decrease in demand for market products, while interest in preferential mortgages remains high, given the low rates. “At the same time, if such programs establish requirements for the initial payment (for family mortgages, in particular, this is a minimum of 20%), then the debt burden is not regulated in any way,” he emphasizes.

The National Credit Rada expects the mortgage market (issuances) to decline by about a quarter this year. The decline could have been less significant if part of the demand in the primary sector had not flowed into instalment programmes actively developed by developers.

In order to curb further rapid growth of indebtedness of citizens and prevent accumulation of risks in the banking system, the Central Bank is introducing new restrictive measures. “They will, of course, put additional pressure on the dynamics of mortgage lending,” the speaker agrees.

“It has been difficult for people to get a mortgage for quite some time now”

According to the Bank of Russia, in January, mortgage lending in the country fell by more than half both compared to December and in annual terms, to 127 billion rubles. True, this is partly due to the seasonal factor, given the large number of holidays at the beginning of the year. In the following months, mortgage lending will probably recover significantly, but, in all likelihood, will still remain significantly lower than in the first half of last year.

According to forecasts, by the end of 2025, mortgage loans worth 3.8-4 trillion rubles will be issued in the country, compared to 4.9 trillion rubles in 2024, and the growth of the total mortgage portfolio of domestic banks may slow down to 6-7% from 13.4% last year.

“We are now seeing a very high percentage of refusals for booking one residential complex. There are a lot of reservations, but 70% of them are rejected because people are unable to get a mortgage,” the speaker shared. “Either the bank starts demanding a commission, which the client did not expect, or they are simply refused due to various reasons and conditions.”

The commercial mortgage market is dead. “I don't know what should motivate a client to take a mortgage at 30%. There are simply no such mortgages now, no one takes market mortgages,” says Khabibrakhmanov. “Now sales are in instalments and under preferential programs, if the cost of housing allows it.”

All benefits for the purchase of housing should be targeted, and the Central Bank of the Russian Federation wants to balance the market, the expert summed up.