All news
Mortgage rates allowed to soar
Regulators will not impose sanctions against banks that inflate mortgage rates until at least the end of the first quarter of 2025. This decision was made in connection with the desire to protect lenders from possible violations of legal requirements in a situation where key interest rates are constantly growing. "Borrowers will be able to receive mortgage loans, despite higher interest rates, without further increase in the cost of housing," is how the Central Bank of Russia justified its decision.
Since 2014, the Bank of Russia has been publishing average quarterly values of the total cost of credit (TCC). In this way, it tried to limit the growth of interest rates. Lenders cannot provide loans at an interest rate that is more than a third higher than the published figure. Since July 1, 2024, the maximum interest rate on a mortgage calculated for this type of loan in January-March has been set at 23.8% per annum. Since October 1, the scale has reached 24.5%.
It is noteworthy that in August 2023, immediately after the start of the monetary policy tightening cycle and the first increase in interest rates, the Central Bank of Russia introduced a moratorium on the application of sanctions against creditors and canceled the PSC standards. After the cancellation of the moratorium in July of this year, restrictive interest rate benchmarks returned to the market. In addition to mortgages, regulators will begin calculating the PSC only in 2024. In fact, this measure was implemented for only 10 days - from October 1 to 10, when the Central Bank of Russia decided to introduce a new moratorium, affecting only mortgage loans.
According to Dom.RF, as of October 11, the average market interest rate on mortgages from the top 20 banks for the purchase of a house under construction reached 23.1% per annum, and on the secondary market - 22.34%. In August 2023, annual rates were 11.09% and 11.19%, respectively. Protective mortgage rates played a cruel joke on housing rentals in St. Petersburg.
The regulator separately noted that it is considering the possibility of rolling back the requirements for compliance with the mortgage SRP on a permanent basis, that is, on a permanent basis. Now, despite the fact that interest rates at the upper level are not limited and cannot be controlled by anyone, banks must adhere to other standards, including requirements for the size of the down payment or the ratio of the loan burden to the borrower's income. In the spring of 2024, a law was passed giving the central bank the right to quantitatively limit the issuance of mortgage loans. However, after the rates are approved, mortgages no longer require additional regulation.