The down payment on mortgage loans with state support will increase from 15% to 20%

The government increased the minimum down payment from 15% to 20% under preferential mortgage programs, which together account for more than half of the issuance of housing loans. Experts consider this decision to be an expected measure to reduce risky transactions against the backdrop of rush demand for mortgages. As a result, the demand for new buildings may decrease by 10–20%, but the share of concessional loans in the total volume of loans issued in the coming months will prevail against the backdrop of high market rates.

The government, by its resolution, increased the minimum down payment amount under preferential mortgage programs from 15% to 20% for agreements concluded after September 20. This will affect all programs – mortgages for new buildings at 8%, IT mortgages at 5%, family mortgages at 6%, Far Eastern mortgages at 2%, as well as rural mortgages at 3%, within which the issuance of new loans is suspended (see “Kommersant” dated August 25) approximately until 2024. This decision is aimed at cooling the mortgage market, which, as the Central Bank previously noted, is showing signs of overheating.

Now loans with state support account for about half of all mortgage loans, and “primary” loans account for the vast majority (in the second quarter about 95%). In August, according to preliminary estimates of the Central Bank, the issuance of preferential mortgages could reach a record level, exceeding 450 billion rubles. A further “switching” of demand for loans with state support is expected due to an increase in the key rate to 12% and an increase in market rates, while interest rates on preferential rates remain unchanged programs. At the same time, more than 60% of mortgage loans on the market of new buildings, according to DOM.RF, are issued with a down payment of less than 20%. With current rates of 14.5–15% and the absence of preferential programs for secondary construction, the Ministry of Construction estimated a possible decrease in demand for primary construction due to this decision at 20%.

The amount of compensation to banks is also being reduced by 0.5 percentage points (pp) – now lost income is being reimbursed up to the key rate, increased by 2.5–5 pp, depending on the program. As the Ministry of Finance previously explained, when the key rate rises, the budget pays a larger subsidy and “banks earn more.”

Regional director of the residential real estate and land development department at Nikoliers, Kirill Golyshev, considers the decision “an expected step aimed at reducing risky mortgage transactions.” According to the head of the analytical center DOM.RF Mikhail Goldberg, the rush demand for mortgages, which is fueled by an increase in rates and the devaluation of the ruble, continues in September, and in January-August 1.2 million loans were issued for 4.5 trillion rubles, which is 1 .5 times more than a year earlier.

As Irina Nosova, senior director of the ACRA group of financial institution ratings, notes, an increase in the down payment could lead to a decrease in demand by 10–15% – it “could fall even more significantly, but developers and banks will try to prevent this by offering new shares and easing requirements.” . However, she adds, a “much more negative effect” will be the continued decline in housing affordability due to rising prices and rates. According to Mikhail Goldberg, by the end of the year there will be a “small reduction in the issuance of mortgages with state support – 20% of the maximum issuance volumes,” which, taking into account the demand of the first eight months of the year, will not greatly affect the statistics for the year (forecast as a whole – 6.3 -6.5 trillion rub.).

According to Kirill Golyshev, the new “restraining factor” will most likely affect transactions towards the end of the year, while the situation in 2024 will depend more on the level of rates than on the size of the down payment.

In the coming months, he notes, demand for mortgages will remain high due to fears of further growth in rates and the desire to buy housing at a lower interest rate. VTB explained to Kommersant that the changes will somewhat “cool” demand in the primary market, but against the backdrop of increased market rates, they do not expect a “dramatic reduction in interest” in government programs – their share in total sales will prevail in the fourth quarter.

Evgenia Kryuchkova