The Central Bank is thinking about banning commissions that increase the cost of apartments when issuing mortgages

As an alternative, the Bank of Russia suggested that developers give a direct discount when issuing a mortgage, rather than shifting costs to the borrower

The Bank of Russia is unhappy with the commissions for the sale of new buildings for mortgages, which overestimate the cost of housing. The regulator intends to establish a ban on such practices. This was stated to journalists by Alexander Danilov, director of the Department of Banking Regulation and Analytics of the Central Bank, RBC correspondent reports.

“We don’t like the story of the commissions, this is one of the subjects of our tough discussion within the standards committee. We are now trying to provide the following wording in the standard: there should be no commissions, which are ultimately paid by the borrower himself and which lead to an increase in the cost of housing and come from the purse of the borrower himself. This is wrong,” Alexander Danilov said.

As an alternative, the representative of the Central Bank suggested that developers give direct discounts, rather than shift costs to the borrower, who does not fully understand the essence of this scheme. “This is a scheme where people don’t fully understand what’s going on. And what happens is that the cost of housing at which they buy increases, but in reality it may be impossible to sell for this money,” he added.

In the spring, the Central Bank revealed new risky schemes in the mortgage market. Among them are the sale through letters of credit and the sale of an apartment with an understated price to affiliated persons. The regulator called both mechanisms risky for the buyer. The Central Bank is currently preparing a mortgage lending standard. It will indicate the inadmissibility of imposing deliberately complex and risky mortgage products on people. In case of non-compliance with the standard, legislative enforcement measures will be applied.

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