“During the entire term of lending”: Putin instructed to fix the rate on preferential mortgages at a level not exceeding 7% per annum

Russian President Vladimir Putin approved a list of instructions based on the results of the St. Petersburg International Economic Forum (SPIEF) held in June.

As part of the initiatives of the head of state, the government, in particular, needs to change the terms of the preferential mortgage program by July 25.

“The interest rate on mortgage loans provided to citizens of the Russian Federation for the purchase of housing in the primary market under this program should be no more than 7% per annum during the entire loan term,” the document says.

In addition, the Russian leader instructed the Cabinet of Ministers, together with the Central Bank, to determine additional mechanisms to ensure the growth of mortgage loans issued in 2022 at a level not lower than 2021.

The relevant proposals of the authorities must be prepared before August 15.

In June, during his speech at the SPIEF plenary session, Vladimir Putin stated the need to help citizens solve housing issues, as well as support the construction sector and related industries, which employ millions of workers.

It is to fulfill these tasks that the president called for the softening of the conditions of preferential mortgages again.

“After a sharp rise in the spring, interest rates in the Russian economy are gradually declining, the Central Bank lowers the key rate.

In this regard, I consider it possible to once again lower the rate on preferential mortgages, ”Putin explained.

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• © Pavel Bednyakov

It should be noted that after the statement of the head of state, Prime Minister Mikhail Mishustin signed a decree at the end of June to reduce the rate on preferential mortgages to 7% per annum.

Now, after the approval of the presidential order, the government will officially have to allocate funds to finance the initiative.

Irina Radchenko, Vice President of the International Academy of Mortgage and Real Estate, spoke about this in an interview with RT.

“Now the key rate of the Central Bank is already at the level of 8% per annum, and the interest on preferential mortgages should not exceed 7% per annum.

That is, the difference of 1% to banks will be reimbursed by the state.

Most likely, this will require several billion rubles,” Radchenko explained.

Recall that under the terms of the program, until the end of 2022, all Russians can take out a mortgage at a reduced rate when buying apartments in new buildings.

The maximum amount of such a loan depends on the region: for the Moscow and St. Petersburg agglomerations - 12 million rubles, and for other regions of the country - 6 million rubles.

In addition, as part of the initiative, citizens can take loans in the amount of 30 million and 15 million rubles, respectively.

However, in this case, the subsidized rate will still apply only to amounts up to 12 million and 6 million rubles (depending on the region) - the rest will have to be paid on market terms.

“For example, if you want to take a loan (on a preferential mortgage in the region. -

) in the amount of 10 million rubles for 20 years, then you can get 6 million rubles at a reduced rate of 7%, and another 4 million rubles at a rate on market conditions (today it is an average of 10.69% per annum. -

).

In this case, the monthly payment will be 112.6 thousand rubles, ”the website of the DOM.RF company says.

Flexible terms

Recall that since the beginning of 2022, the terms of the preferential mortgage program have changed several times.

So, even in winter, with the key rate of the Central Bank of 9.5% per annum, Russians could get a preferential mortgage at 7%, but at that moment the maximum loan amount was the same for all regions of the country and amounted to 3 million rubles.

At the end of February, against the backdrop of Western sanctions against Russia, the Central Bank raised the key rate to a record 20% per annum to curb inflation.

As a result, Russian banks began to massively increase interest on housing loans, and in mid-March, the national average reached 23-24% per annum.

Under these conditions, the authorities raised the rate on preferential mortgages to 12% per annum and at the same time raised the maximum loan amount.

As the situation in the economy stabilized since April, the Central Bank began to gradually reduce the key rate and today returned it to the level of December 2021 - 8% per annum.

At the same time, the authorities decided to lower the rate on preferential mortgages - first to 9%, and now to 7% per annum.

“Today, the reduction in the rate on preferential mortgages has seriously updated.

Moreover, given the deflation observed in Russia and a significant decrease in the key rate, it is likely that in the future the preferential rate may be lowered below 7% per annum, ”said Mark Goykhman, chief economist at the TeleTrade information and analytical center, in a conversation with RT.

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• © Alexey Sukhorukov

It is curious that at the moment most Russian banks are already issuing such loans at a lower interest rate than indicated in the program.

So, according to DOM.RF, today you can get a preferential mortgage in Russia at an average of 6.63% per annum.

“Reducing the rate on preferential mortgages gives banks the opportunity for price maneuvering, in particular with insurance or additional terms of contracts.

The program itself has become the most popular product in terms of mortgage lending, and banks are interested in attracting customers in this direction.

Therefore, the terms of contracts for customers are flexible and comfortable right now, ”Pavel Sigal, First Vice President of the All-Russian Public Organization of Small and Medium-Sized Business Support of Russia, explained to RT.

According to Mark Goykhman, in the near future the popularity of subsidized mortgages in Russia may further increase.

At the same time, the expert does not yet expect a serious increase in demand in the real estate market.

According to Irina Radchenko, the current conditions may lead to cheaper square meters in the country.

“Housing prices in Russia are still high, but have already begun to decline amid insufficient demand.

According to my estimates, in the autumn the market will return to pre-Covid values ​​for the cost of apartments - to the level of 2019.

That is, all the foam that was caused by the pandemic and led to a 20% increase in prices should subside.

The increase in prices then was not market-based, but speculative,” Radchenko explained.