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Payment is more important than interest
According to JSC Dom.RF, at the beginning of October 2024, there was a noticeable decrease in the issuance of mortgage loans, and the average interest rate also increased significantly. At the same time, experts are confident that mortgage rates have already exceeded the "prohibitive" level and will continue to grow, since borrowers are primarily concerned about monthly payments. However, this will not be possible in the near future, since this involves extending the loan term. Therefore, the calculations of developers and banks are based on the development of a combined plan and the expansion of preferential programs.
According to data from JSC Dom.RF, published on Monday, October 14, 15 thousand mortgage loans worth 64 billion rubles were issued in the first week of October. At the same time, 25 thousand loans worth an average of 90 billion rubles per week were issued in September. "Issuance decreased against the backdrop of high interest rates, but not as significantly as previously expected due to high rates of growth in household income and the spread of mortgage programs by developers," Dom.RF noted in its review. It also turned out that although the volume of issuance in September was similar to the level of August, it decreased by more than 20% compared to the first half of the year.
At the same time, the average interest rate on loans for the purchase of new housing from the top 20 banks at the beginning of October reached 23.08% per annum, which is more than 2 percentage points higher than in September.
As Mikhail Goldberg, head of the Analytical Center "Dom.RF", explained, the circulation under the market program is expectedly decreasing, but in terms of volume it is ahead of the forecast values. "As household incomes grow, small loans remain popular, despite exorbitant interest rates. They are mainly used to improve housing conditions when selling an old apartment," he says. Kirill Klimentyev, an analyst at the investment company Digital Broker, notes that citizens continue to take out market mortgages because they look at the monthly payment, not the interest rate. "This increases the average mortgage term - from 17.9 years to 24.9 years since the beginning of 2020," he points out.
At the same time, experts expect further growth in interest rates on mortgage loans. In its review of the mortgage lending market, ACRA notes that this may be caused by the mortgage lending standards designed to protect the rights of borrowers, which will come into force at the beginning of 2025. "Banks will probably begin to take into account the percentage of benefits lost as a result of applying this standard," the document says. "Removing restrictions on the size of the CFC (total cost of the loan. - Kommersant) also removes restrictions on the interest rate on the loan," says Sergey Gordeyko, head of the Ipoteka.global platform. In addition, the market is also supported by expectations of an increase in interest rates. According to Mr. Gordeyko, mortgage rates may grow by 1 percentage point above the current value.
Moreover, this trend will continue until the end of the year. As Mikhail Goldberg noted, although interest rates are high, their further increase does not affect the overall situation, since they have long exceeded the level considered prohibitive (15% per annum). Anna Avakimyan, senior analyst at RegBlock, believes that the timely renewal of limits on preferential mortgage programs until March 2025 will be very important. Currently, mortgage loans issued in combination with a down payment of 20-35% are very popular. "Developers work with banks to issue so-called package mortgages. Here, 40-70% of the loan amount is a preferential component, and the rest is issued at market rates. As a result, the average interest rate on these loans is 12-18% per annum," the expert explains. At the same time, the inevitable increase in interest rates worsens the situation of borrowers in terms of extending the loan term. “The scale of overall costs and stricter conditions in case of delay will create a tendency to buy apartments of a smaller size in price and, accordingly, area,” noted Gennady Fofanov, president of the investment platform InvoiceCafe.