Mortgage debt of Russians reached a record 15.1 trillion rubles in May

At the end of May 2023, Russians’ mortgage debt amounted to a record 15.1 trillion rubles. The debt growth rate accelerated to 2.3% compared to April. Also, in May, banks issued 157.8 thousand mortgage loans in rubles in the amount of 580.5 billion rubles. This was reported press office Central Bank of Russia.

According to the Central Bank, on an annual basis, the growth rate of the housing mortgage lending portfolio increased from 18.6% in April to 21.4% in May, providing about 67% of the increase in individuals’ debt on loans. Mortgage debt still makes up 52.2% in the structure of the consumer portfolio.

The Central Bank also recorded an increase in the activity of mortgage borrowers. Mortgage issuance rates quadrupled in May 2022, when borrowers slowed down amid uncertainty.

The Central Bank also added that in May the weighted average mortgage rate fell by 0.12 percentage points to 8.40%. The regulator linked the rate cut to a decrease in the cost of lending in the finished housing market – in May, the rate was 9.87% against 10.01% in April. In addition, the share of loans for the purchase of housing under construction, where the rate is traditionally lower, increased from 35.4% to 36.2%.

The day before, the Supreme Court of Russia ruled that bankrupt mortgage lenders will be written off their loan debt if the bank took the mortgaged housing, even in cases where the value of the property does not cover the entire debt. However, the value of the collateral must not be less than the amount of the loan at the time of issuance.

More details – in the material “Kommersant” “Housing writes everything off”.

Olesya Pavlenko