Major banks have begun to reduce rates on market mortgages

In June, for the first time in three years, the Central Bank immediately reduced the key rate by 1%, which determines the cost of mortgages in the credit market. The regulator's signal to soften monetary policy was heard by the largest Russian banks, which promptly reduced rates on a number of programs. Experts are sure that the new trend will strengthen in July. But despite the positive changes, unsubsidized mortgages remain unaffordable for most Russians.

It is no secret that in the first half of the year, clouds gathered over the mortgage market. Issuances fell almost every month. According to the United Credit Bureau, the volume of mortgage loans issued in the Russian Federation last May fell by 60% compared to the same period last year, to 231.25 billion rubles, and compared to April, it decreased by 20%. The main reason for the decline is the record high "key" and regulatory restrictions.

As economist and top manager in financial communications Andrey Loboda told MK, by the beginning of summer the national mortgage market had entered the stabilization zone. At first, rates rose sharply, and borrowers' interest shifted towards preferential programs. But then people's budgetary constraints left many categories of citizens outside the demand. At the same time, the number of refusals for market mortgages increased: banks began to approach solvency assessment more strictly due to high debt burden. The economist noted a reduction in the volume of transactions on the secondary market and a slowdown in the primary market, especially in the regions, as the main trend in the sector.

Currently, banks are focusing on borrowers with high creditworthiness. "First of all, citizens with a fairly high Personal Credit Rating (PCR) and a DTI level of no more than 50% can count on receiving a mortgage," said Alexey Volkov, Marketing Director of the National Bureau of Credit Histories. According to his estimates, the largest number of mortgage loans were issued in Moscow, St. Petersburg, Moscow, Tyumen and Sverdlovsk regions. All these regions are distinguished by high economic activity. According to Frank RG, in May the average loan issued was 4.97 million rubles.

Therefore, the positive signal from the Central Bank was met favorably by the participants of the banking market. Just a couple of days after the regulator's decision to reduce the "key" by 1%, the country's largest bank announced a reduction in rates on market mortgages in the range of 2 to 3.5 percentage points. Following it, VTB announced a reduction in rates on market programs by 1.5-2 percentage points in the second half of June. Other players from the TOP-10 also announced similar steps.

"A 1 p.p. reduction in the key rate to 20% is an important signal, but it does not mean an immediate improvement in the situation," Loboda emphasized. According to him, banks are changing the terms gradually, and rates on loans are being reduced less willingly than on deposits. On average, the market is expected to reduce rates by 0.5-0.7 p.p. for new applications. "Against this background, mortgages on the primary market may fall to 20-23% per annum, on the secondary market - to 23-25%. For a mass improvement in conditions, the Central Bank needs to give a signal: this is the beginning of a sustainable easing cycle, and not a one-time measure," the economist concluded.

"Many players in the mortgage market have adopted a 'wait-and-see' attitude and are not seeking to stimulate mortgage demand due to the ongoing macroprudential capital allowances, as well as the macroprudential limits expected to come into effect in July," Inna Soldatenkova, head of expert analytics at Banki.ru, told MK. For this reason, she expects that by mid-July the average reduction in mortgage rates will 'crawl' to 1 percentage point. However, some large players may adjust their rates more significantly. Especially if the Central Bank sends 'soft' signals to the market.

According to the forecast of leading analyst of Freedom Finance Global Natalia Milchakova, by the beginning of July after a series of reductions average mortgage rates in Russia at the largest banks may fall to 19-22% per annum. But this is clearly not enough. For the overwhelming majority of Russians, expensive market mortgages remain an unaffordable luxury. It is no secret that today ordinary citizens usually take out unsubsidized mortgages for a very short period.

"Market mortgages may become widely available again if the average rate falls to the range of 12-15% per annum. This is the level at which the loan payment can be considered comparable to rent in most regions. However, all this will only be possible with a steady slowdown in inflation and a further reduction in the key rate - approximately not earlier than the end of 2026," concluded Andrey Loboda.

Published in the newspaper "Moskovsky Komsomolets" No. 29547 of June 24, 2025

Newspaper headline: Central Bank sends 'soft' signal