How the conditions of preferential mortgages have changed since 2022

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On February 28, the Bank of Russia set the key rate at 20%. It was followed by mortgage rates , the issuance of loans almost stopped, and the prospects for the construction industry became rather vague. How the government is changing mortgage programs to support citizens and the real estate market. 

New rules for preferential mortgages 

A subsidized mortgage is a loan secured by real estate with a reduced subsidized rate. For example, family mortgages, military mortgages, mortgages on new buildings.

The difference between the market and preferential rates is paid to the bank by the state. Despite a significant increase in the key rate and the burden on the state budget, the conditions of a number of preferential mortgage programs have been preserved :

  • family mortgage at 6%; 
  • Far East mortgage at 2%;
  • rural mortgage at 3%.

On April 1, 2022, new conditions for preferential mortgages for new buildings came into force . The rate increased from 7 to 12%, but the maximum loan amount increased from 3 to 12 million rubles. for Moscow, St. Petersburg, Moscow region, Leningrad region and up to 6 million rubles. for other regions. The program will last until July 1, after which it will be finalized depending on the economic situation.

Also , the government and the Central Bank are developing a program to subsidize the interest rate on loans for developers for project financing.

Preferential mortgage conditions for IT-specialists 

Employees of the IT sector have their own preferential mortgage with a rate of 5% . The Minister of Digital Development, Communications and Mass Media Maksut Shadayev first said that IT specialists from 22 to 40 years old with an income of 200,000 rubles will be able to get preferential mortgages . per month in million-plus cities and from 150,000 rubles. in the regions. 

But later the wage threshold was reduced by 50,000 rubles. Now a preferential mortgage is available to IT specialists with a salary of 150,000 and 100,000 rubles. respectively.

Why support the real estate market

In the context of a high key rate, mortgage programs are the only incentive for the real estate market . Deputy Prime Minister of the Russian Federation Marat Khusnullin, who oversees the construction industry, noted that the development of the construction industry and the ability of people to buy housing depend on the support of mortgage programs .

Prior to the increase in the key rate , the share of preferential mortgages in banks was about 35%, in March this figure rose to 80%. Borrowers are unable to take out market mortgages due to high interest rates .

Anton Pavlov, Deputy Chairman of the Board of Absolut Bank, claims that from March 1 to March 16, the number of applications for mortgages fell by half compared to February.

“Like many market participants, we are seeing a reduction in demand for mortgages . This is due, firstly, to the increase in rates . Secondly, with rising real estate prices . Only in a week in some regions prices increased by 5-7%. Thirdly, with the uncertainty in the economy and the uncertainty of citizens in their ability to pay in the medium term.”

Anton Pavlov

Deputy Chairman of the Board “Absolut Bank”

The banker also emphasizes that in the segment of preferential mortgages , demand fell slightly . This indicates the desire of citizens to improve their living conditions, but on the condition that the loan rate is not prohibitive – as statistics show , no higher than 12%. In March, some banks set the mortgage rate at 22-25%.

Ekaterina Shchurikhina, director of bank ratings at Expert RA, believes that the redistribution in favor of preferential programs will continue until market mortgage rates drop to 12-13% .

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