Long-term loans changed their structure and became more expensive at the beginning of 2024

The beginning of 2024 brought noticeable changes to the structure of long-term loans. Rates for the market as a whole exceeded 17.3% per annum, a record since August 2015. This was largely due to the dilution of the share of relatively cheap preferential mortgages, while citizens actively took out car loans, the rates on which were close to 19% per annum. Experts do not exclude that in the near future high rates will play a role in slowing down the issuance of loans. Moreover, the Central Bank may maintain the key rate until the beginning of the second half of the year.

According to according to the Bank of Russia, in January of this year, several multi-month and multi-year highs were updated both in terms of rates on personal loans and in share. Thus, the weighted average interest rate on retail loans for a period of over three years reached 17.3% in January, which is a record since August 2015, when it reached 17.8% per annum. In the previous year and a half, it did not rise above 14% per annum.

The Central Bank does not fully disclose the structure of issued loans by maturity. However, long-term loans are usually associated with a mortgage. At the same time, according to the Bank of Russia, the volume of such loans in January decreased sharply (compared to December) – almost three times, to 271.7 billion rubles. This was the lowest figure since the summer of 2022. In addition, during this period, banks significantly reduced the issuance of preferential mortgages, which inevitably affected the average rate of long-term loans (see “Kommersant” dated February 10).

It is significant that at the same time, the share of car loans issued in January for a period of more than three years reached 12.4% for the first time (previously it did not rise above 10%).

At the same time, the rate on long-term car loans reached 18.7% per annum, which became a record since May 2022. According to Frank RG, car loans accounted for more than half of the growth in the total portfolio of loans to individuals in January (RUB 132.4 billion). At the same time, growth did not slow down in February, despite high rates, and a record for issuances in the entire history was set – more than 171 billion rubles. (see “Kommersant” dated March 7).

In January, many car companies, according to experts, stepped up support for their brands in the form of direct discounts. As Vyacheslav Yakubchik, head of the development department for partnership programs and strategic segments at Rosbank Auto, explained, dealerships offer additional benefits to customers by providing a discount when applying for a loan. “Thus, some of the clients who came to buy a car with cash are switching to a loan. For such categories, the monthly payment is not important, and they take out loans for shorter periods,” the expert notes. VTB believes that the increase in the share of long-term car loans is associated with the desire of borrowers applying for loans under basic banking programs to choose a car in a wider price range and maintain an acceptable monthly payment.

Taking into account the record levels of car loan issuance in February and the decline in mortgage issuance activity, the record for the share of car loans in the total volume of long-term loans issued may be updated. “The demand for car loans will remain quite high due to the general dynamics of the car market, and the behavior of rates will depend on the monetary policy of the Bank of Russia,” says Valery Piven, head of the financial institutions ratings group at ACRA.

At the same time, experts note that the Central Bank’s tough position regarding long-term retention of rates motivates Russians to take out a loan today, before conditions worsen.

At the same time, according to Digital Broker analyst Natalia Pyryeva, the rhetoric of the Bank of Russia rather indicates that the regulator has reached the peak in the rate increase cycle, so the pace of lending may slow down in March. “Resumption of lending growth can be expected in the second half of the year, when and if the Bank of Russia starts lowering rates,” she says. According to her, the mortgage market will continue to support preferential programs, so it is likely that we will not see a significant drawdown on mortgages in the near future.

Maxim Builov, Polina Trifonova