The Central Bank will increase premiums on risk ratios for mortgage loans – Kommersant

From March 1, 2024, the Central Bank will increase premiums on risk ratios for mortgage loans. The regulator cited the reason for this decision as the need to limit the risks of debt exposure for citizens.

The press service of the Central Bank reminds that since October of this year, macroprudential premiums on mortgage loans have already been significantly increased in segments with a low down payment and a high debt burden ratio (DLI). However, this measure turned out to be insufficient, and therefore the Bank of Russia decided to once again increase the premiums on risk coefficients for loans with a high personal income tax in March.

The Central Bank emphasizes that there is now a significant deterioration in lending standards in mortgage lending against the backdrop of rapid lending growth. “Over two years, the share of loans provided to borrowers with a personal income tax of more than 80% almost doubled and amounted to 47% in the third quarter of 2023. Loans for the purchase of housing with a low (up to 20%) down payment have reached 50% of all mortgages issued,” notes the Bank of Russia.

In November, the head of the Central Bank Elvira Nabiullina reported during a speech in the State Duma that over the year the mortgage portfolio of banks grew by 32%. She noted that this trend worries the Central Bank, since this process is accompanied by rising housing prices. In just three years, prices for new buildings have increased by 90%.

After tightening requirements, according to forecasts experts, the issuance of preferential mortgage loans for new buildings may decrease by 20–40%. The most sensitive for the market may be an increase in the down payment to 30%. But the demand for preferential mortgages is already falling, and interest is shifting to “family mortgages.”

More details in the material “Preferential mortgages are freezing”.

Alexander Kislov