From January 1, loans will be issued in a new way: who will be affected by the changes

Housing loans and preferential mortgages

To get a mortgage in the new year, you will need to make a down payment of not 20, but 30%. At the same time, the authorities limited the maximum loan size in all regions for preferential mortgages to 6 million rubles, although previously for Moscow, the Moscow region, St. Petersburg and the Leningrad region it reached 12 million rubles. And with a preferential mortgage for new buildings, it will not be possible to take out an additional loan amount (the so-called combined mortgage) at market rates. Before this, the loan amount could be increased to 30 million rubles in the region of the “two capitals” and up to 15 million rubles in the rest. Now this opportunity will remain only within the framework of family mortgages and mortgages for IT specialists.

Ivan Samoilenko, managing partner of B&C Agency, comments:

“Changes on mortgages in the country are overdue – both the Ministry of Finance and the Central Bank have spoken about this more than once. The regulator sees signs of overheating in the real estate market: an increase in mortgage volumes, a rapid increase in the cost of housing, while at the same time a strong increase in the debt of citizens, the volume of non-payment of loans… The authorities fear a potential crisis of non-payments, which could lead to difficulties in the construction industry and in the banking sector. Therefore, requirements for borrowers are becoming stricter, and mortgage rates are rising. There are also prospects for curtailing certain preferential mortgage programs. In 2024, a decrease in the volume of issued mortgage loans is predicted, which are becoming too expensive for citizens, as a result of which the demand and cost of housing will begin to decline (on average across the country, by 10-15% per year). Those who want to buy a home on credit should wait for apartment prices to drop and try to make a large down payment – this will reduce the cost of the mortgage loan.”

Andrey Loboda, economist, director of communications at BitRiver, comments:

“Apparently, banks are gradually moving into forced manual braking mode, otherwise why make such a large down payment? That is, there is some unspoken intention to slow down the expanding “bubble” of the real estate market, which the Central Bank tirelessly warned about.

It is also possible that recently banks have already managed to replenish a sufficient number of mortgage portfolios, so that they have a certain reserve.

Too large a down payment may also indicate that credit institutions want to protect themselves from low-quality and unreliable clients. After all, if the borrower contributes a large share of the cost of the apartment, this, at a minimum, indicates his solvency and intention to repay the loan, and not become a debtor in the future.

Almost 80% of mortgage loans in Russia are preferential. The mortgage market is overheated and needs a break. Of course, for those wishing to buy an apartment this is not the most pleasant news, but for the market it will be a cooling shower. In general, until mortgage rates are significantly below 7-8%, innovations and concessions are unlikely to significantly improve the financial well-being of Russians.”

Alexey Krichevsky, financial analyst, independent real estate expert, comments:

“Demand is bound to change after such tightening of conditions. Purely for statistics, the down payment has now increased 4 times compared to 2020. That is, today’s down payment is 55-60% of the cost of housing at prices three years ago. And taking into account the fact that household incomes are growing much slower than real estate prices, this will deal a very serious blow to demand, so that next year we can expect a sharp slowdown in sales. But this will not affect the cost as harshly as buyers would like. The approximate “fork” of price movement is 5% in both directions. With a decline in demand, developers will come up with new stories with supposedly preferential mortgages, update outlets, put a smaller volume of apartments on sale, and in the end they will still have to reduce prices. By the way, this will not be critical for developers – some companies’ net profit has increased 5 times in three years.”

Microloans and credit holidays

When applying for a loan from January 1, banks and microfinance organizations (MFOs) will have to not only calculate the financial burden before issuing a loan and warn clients about the risks, but also send them written notifications. The client is required to sign the notice, thereby assuring that he is familiar with the information.

From 2024, credit holidays will become more accessible, and they will be available for any credits and loans. In addition, starting from the new year, borrowers will have the opportunity to apply for credit holidays not only for mortgage loans, but also for consumer ones. They will continue to be valid for up to six months, and the conditions for approval are the same: if income fell by more than 30% compared to the previous year, if the client suffered in an emergency. You can take out a deferment for one loan only once. The maximum loan amounts remain the same: credit cards – 150 thousand rubles, car loans – 1.6 million rubles, other consumer loans and loans – 450 thousand rubles.

From January 21, 2024, a new rule regarding additional loan services will come into effect – you can cancel them within 30 days, not 14, as now. Also, banks and microfinance organizations are required to include the cost of all additional services in the full cost of the loan, and their employees must notify clients of the right to refuse these services.

Mark Goikhman, analyst at the Capital Skills Financial Academy, comments:

“The Bank of Russia is concerned about the increase in people’s debt load. It can create risks both for the borrowers themselves and for banks. The Central Bank of the Russian Federation notes with alarm the growth in lending to borrowers with a high “debt burden ratio” (DLR). This is the share of all loan payments in the total income of the borrower. It is considered normal if he allocates no more than half of his income for these purposes, that is, the PIT is less than 50%. But according to the Central Bank, in mid-2023, 64% of loans went to those who spent more than half of their income on servicing them. The share of loans with personal income tax increased from 50 to 80% – from 27% to 33%. And even the critical 80% of PDN accounted for as much as 32% of the loan portfolio.

Tightening regulatory requirements will make it more difficult for those with insufficient income to obtain loans. Together with the increase in the Central Bank’s key rate to 16% in December 2023, this will reduce the demand for loans and slow down the increase in their total amounts in the economy. The consequences of such a step are manifold. Risks in the banking system will become relatively lower. This will be facilitated by the wider use of credit holidays. But people’s ability to make purchases will also be somewhat reduced. On the one hand, this helps curb inflation and price increases, which is also one of the goals of the Central Bank’s innovation. But on the other hand, the sales potential for the business will also decrease. And this is already holding back economic growth.”

Ivan Samoilenko, managing partner of B&C Agency, comments:

“The Central Bank is taking the path of tightening regulation of the activities of microfinance organizations, where loans are issued at very high interest rates, and citizens do not always understand the burden they are taking on. Therefore, microfinance organizations will now be required to notify borrowers about the real cost of the loan and the amount of interest. This is being done to prevent a sharp increase in the debt load of citizens against the backdrop of weak dynamics in increasing their income.”

Anastasia Chumak, co-head of the Intercession investor rights practice, comments:

“It is unlikely that informing debtors will affect the volume of loans issued. Limits on the maximum debt load are more effective. According to the requirements of the Central Bank, from the fall of 2023, microfinance organizations (MFOs) can issue no more than 15% of loans per quarter to those with a debt burden ratio (DLI) above 80%. For banks, this limit is set at 5%. As for the total number of borrowers, both banks and microfinance organizations have a portfolio of borrowers with a personal income tax of 50-80% that should not exceed 30%.

It is likely that a combination of factors, including the key rate and strict requirements for personal income tax, will make it more difficult for microfinance organizations to attract high-risk loans. And, yes, the opportunity to receive credit holidays for consumer loans will logically lead to their growth. Since a significant number of borrowers have such a need.”