The Central Bank proposed to increase the minimum contribution on preferential mortgages

The Bank of Russia proposed that the government again increase the minimum down payment under the preferential mortgage program in order to cool the housing loan market. The Central Bank is concerned that citizens keep their savings in high-interest deposits and make money on the resale of preferential mortgage apartments when people in need of housing cannot afford it.

Since September 20 of this year, the government has increased the minimum down payment for loans issued under preferential lending programs from 15% to 20%. “We believe and have sent a proposal to the government that it is still necessary to raise the down payment requirement for a preferential mortgage, but this is the government’s decision,”— said Head of the Central Bank Elvira Nabiullina at a press conference on October 27.

According to the head of the regulator, there is no widespread practice of reselling apartments on preferential mortgages and making money on the difference. However, she expressed concern that the source of such income is taxpayers’ money. Ms. Nabiullina emphasized that the significant increase in real estate prices in Russia over the past three years has greatly exceeded inflation and income growth, which also neutralizes the effect of preferential mortgage programs.

Today, due to accelerated inflation, the regulator raised the key rate from 13% to 15%. To weaken it, according to the head of the Central Bank, it will be possible go in 2024 “after a sustained decline in inflation.”

More details in the material “Race with inflation”.

Alexandra Goroshilova