It's official: average rates on market mortgage programs have risen to almost 17%. But the reality is even worse

It all depends on the specific bank and client category, notes Alexey Novikov, director of the mortgage lending department at Est-a-Tet. There is a range in the market from 15.6% to 19%, but on average it is really 16.7-17%.

However, these are often a kind of “advertising” rates, which are listed in large numbers on banks’ websites, but are valid only under certain conditions. You just have to read the more detailed terms and conditions for issuing loans. Thus, one of the large banks indicates that you can take out a mortgage at a rate of 16.7%. However, the base rate is 20.8%, says Ruslan Syrtsov, managing director of Metrium. It can be reduced to 16.7% only by fulfilling a number of conditions. Among them are making a down payment of more than 30.1%, using electronic registration services, choosing housing on a subsidiary service of the bank, and life and health insurance. In addition, you need to have a deposit in this bank or its salary card. Thus, draconian requirements are imposed on clients, says Syrtsov.

However, even taking them into account, the rate remains extremely high. Another bank indicates that clients can get a loan for secondary use at 16.4%, but then honestly states that the range of the full cost of the loan is 18-24.4%.

After the Central Bank increased the key rate at the end of 2023 to 16% per annum, banks adjusted their market mortgage rates to 17-18%, says Rustam Azizov, director of mortgage sales and implementation of financial instruments at A101 Group of Companies. This has significantly reduced the affordability of housing — the monthly payment for a two-room apartment worth 12 million rubles is now more than 160 thousand rubles. If the Central Bank rate remains unchanged, no further rise in mortgage prices is expected, Azizov predicts. “For now, a gradual reduction in the key rate seems to be a more realistic option,” he said. — If the macroeconomic situation develops well, this process may begin by spring, and by summer the key rate may reach 10-11%. Then market mortgage rates will reach a quite workable level of 11-12%. However, now it is hardly possible to make a more unambiguous forecast due to a number of global economic factors.”

Rates on preferential mortgages for new buildings and “Family mortgages” have reached the permitted limit — 8% and 6%, respectively.

The mortgage market has been in a fever for more than six months due to increases in the Central Bank rate, various kinds of tightening of preferential mortgages and the issuance of mortgage loans in general. The next deadline (the approaching end of preferential programs, their tightening, the expectation of rising rates) so far only leads to the fact that Russians are buying housing with great excitement. Which, in turn, supports prices. In January, another trigger was a conflict between banks and developers over the requirement of credit institutions to pay commissions for issuing preferential loans.

Mortgage issuances in December were 11% higher than in December 2022, DOM.RF reports. The secondary market dropped by 12%, but the primary market grew by 59%.

Developers didn’t even really need traditional New Year’s promotions. Against the backdrop of high consumer activity, they announce special offers only as a sign of loyalty to customers, says Syrtsov. At the same time, the average size of discounts in December 2023 returned to the standard level — 3%, the maximum figure was reduced to 23%. Holiday promotions were held in every fourth project on the primary market, which is much less than the results of 2022. A year earlier, developers introduced discounts in almost all complexes, except for elite ones, where there are traditionally no open discounts. For comparison, the largest recent average discount — 7% — was noted in April 2023, and the maximum discount in a specific project for the period from October 2022 to March 2023 was 63.3%.

The weighted average mortgage rate in general, according to the Central Bank, over the past year has not increased as significantly as mortgage rates. If at the beginning of the year it was 6.65%, then in November it was 8.18%. This is explained by the increasing share of demand for primary housing, which is purchased under government programs.

source: «Russian newspaper»