For the fourth time in a row, the Central Bank kept the key rate Until the regulator’s decision, the largest banks have already raised mortgage rates. According to experts, other credit institutions may join them, increasing rates in anticipation of tightening monetary policy in the future.
For the fourth time in a row, the Bank of Russia maintained its key rate of 16% per annum. It has been at this level since December 2023. Many analysts and economists predicted an increase in the Central Bank’s rate amid rising inflation and overheating of the economy. At the same time, the regulator does not exclude an increase at the next meeting.
What impact can the Central Bank’s decision have on the mortgage market and the level of interest rates on housing loans — we tell you in the material “RBC-Real Estate.
An increase in mortgage rates is possible
Even before the Central Bank’s decision, large Russian banks raised mortgage rates. But experts interviewed by RBC-Real Estate disagree on the further dynamics of rates. Some believe that the rise in the price of market mortgages will continue, others admit a reduction in rates.
The Central Bank did not raise the key rate today, but it has tightened its rhetoric and allows it to rise at the next meeting, says Igor Dodonov, an analyst at Finam Financial Group. “The country’s leading banks will refrain from further increasing mortgage rates for the time being. Nevertheless, the average mortgage rate may rise slightly in the coming weeks, by 0.2–0.3 percentage points, since smaller banks may also decide to raise their mortgage rates, taking into account the increased likelihood of tightening monetary policy in the medium term,” the expert explained.
Alexander Tsyganov, head of the Department of Mortgage Lending at the Financial University, believes that banks that have raised mortgage rates will now leave them unchanged. But they can offer discounts to certain categories of borrowers. “Banks that did not raise mortgage rates before the decision on the key one will no longer do this,” he believes.
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A similar point of view was expressed by Ksenia Yakushkina, Director of Bank Ratings at Expert RA agency. According to her, due to the preservation of the key interest rate, the increase in the cost of borrowing may slow down. “Credit institutions that have been waiting for the official decision of the regulator will leave the rates on their products at the same level for now,” Ksenia Yakushkina said, noting that market mortgage rates remain very high in any case.
Valery Piven, Managing Director, Head of the ACRA Financial Institution Ratings group, allows for a reduction in rates. “In addition to the Central Bank rate, the cost of a mortgage loan is influenced by market conditions, as well as the target marginality of the loan. If there is no demand for increased rates, they may decrease,” the expert noted. “Demand for mortgages is lower now than at the beginning of the year. Preferential mortgages still determine the main number of transactions,” he said.
As for the reduction of mortgage rates in the market as a whole, experts do not yet see any prerequisites for this. “So far, there are no fundamental reasons in the [current] economic situation of the country for reducing key and market rates. At the same time, the trends towards an increase in the key rate remain,” Alexander Tsyganov noted. “A reduction in mortgage rates will be possible no earlier than the end of the year if the inflationary trend becomes more favorable and the Central Bank begins to give signals about the possible beginning of policy easing,” added the analyst at Finam Financial Group.
Which banks have already increased mortgage rates
On June 5, Sberbank (1st place in loans) increased mortgage rates by 1.5 percentage points. After the increase, the minimum rates for the purchase of new buildings and secondary buildings start from 18.2% per annum. On May 31, Alfa-Bank (3rd place) I raised the rates by 1 percentage point for market programs. Minimum rates for new buildings, ready—made housing (apartments) and refinancing – from 18.19%.
On May 29, VTB announced an increase in mortgage rates (2nd place). The minimum rate there was from 17.5% per annum with an initial payment of over 30%, a large loan amount, as well as if the client connects the comprehensive insurance service, confirms income and employment. Mortgage rates in May were increased by 0.5 percentage points by Sovcombank (8th place) and Uralsib (11th place), and UBRiR Bank (18th place) — by 0.7 percentage points.
As a result, average mortgage rates have increased. According to “Dom.RF”, at the beginning of June, the weighted average mortgage rate for new buildings of the top 20 banks is 17.11% per annum (+0.35 percentage points per week), on the secondary market – 17.23% (+0.28 percentage points), for the purchase of a finished house — 17.54% (+0.16 percentage points), for the construction of a private house — 16.68%, the refinancing rate is 17.56% (+0.53 percentage points). Rates for preferential mortgage programs have not changed and range from 2% to 8%.
Demand will stay on benefits
In such conditions, the main part of mortgage loans will take place under preferential programs, and the completion of a mass mortgage with state support and the transformation of the family program can fuel interest in them, experts say. “In June, before the completion of the preferential mortgage, a short—term surge in demand is likely, as borrowers will seek to take advantage of more favorable conditions,” says Polina Shchukina, analyst at Finam Financial Group. “However, demand will decrease sharply in July, as the high cost of loans due to an increase in interest rates will make them less attractive,” she added.
Alexander Tsyganov from the Financial University expects increased demand “for the remnants of preferential mortgages for new buildings.” “People will try to get a loan in time before the end of the program. Where there will be high demand, prices may rise. In segments where mortgage loans are not so popular now, the opposite situation may be,” the expert noted.
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In his opinion, sellers will actively offer discounts in the secondary market due to high rates, thereby partially reducing the mortgage burden. In addition, prices on the secondary market, even in newly commissioned residential complexes, are already lower than the cost of housing under construction. “When people buy a primary, they expect that the apartment will become more expensive. But this is no longer the case. Now, as soon as a new building becomes secondary, it becomes cheaper — by analogy with a car,” explained Alexander Tsyganov. Plus, the secondary has an advantage — you can live in it right away, you do not need to make repairs and spend money on rent. Therefore, the demand for secondary products will remain, although not so high, he concluded.
The disbursements have already accelerated
In May, mortgage disbursements accelerated against the background of the end of preferential mortgages, VTB noted earlier. According to the bank’s estimates, in the whole market in May, mortgage issuance in Russia increased by 10% compared to April and amounted to 510 billion rubles. They expect an even bigger surge in demand in June. According to the bank’s forecast, in the first month of summer, sales on preferential mortgages for new buildings may increase by almost a third compared to May values.
Realtors also note the increased interest of buyers of new buildings on the eve of the end of the preferential program. According to Incom-Real Estate, in May the number of requests for the purchase of new housing increased 1.5 times, and the main demand is focused on small-sized apartments, which, due to the low budget, are most suitable for the parameters of the program.
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