More expensive than gold: how mortgage interest will rise in 2025
A number of banks offer mortgage loans at 43% per annum. Some analysts predict the rate to rise to 50% and even higher. Izvestia has looked into the situation.
About zero probability
Increase in mortgage rates up to 50% is possible only in a very serious crisis, experts interviewed agree.
Kirill Sivolapov, a senior lecturer in investment and construction business and real estate management at the Faculty of Market Technologies of the IOM Presidential Academy, says about the extremely low probability of such a development.
- Mortgage rates are related, of course, to the key rate, and with its increase some growth is possible. But it will not affect the market much: the demand has already decreased due to high mortgage rates. Few borrowers will be able to afford the rate that is now, not to mention the higher one, - the expert believes.
In his opinion, in the case of another rise in mortgage rates, the industry will look for other ways out of the situation. "However, it is too early to predict which ones," summarizes the expert.
Partial alternative
Talking about the 50% rate, obviously, they mean all the same marginal cost of credit, which is made up not only of the rate, but also insurance and other products mandatory in the contract, believes Deputy Director of the Banking Institute of Development Julia Makarenko.
- With this understanding of 50% no longer seems like an exorbitant load: the last time the media reported on the marginal cost of credit at 43.5%. And taking into account the growing key rate, the new commission, which is being introduced or waived by banks, as well as taking into account the increase in the cost of the bank to formalize each transaction and risks, - 43.5% - is far from the limit - argues financier.
Makarenko refers to the commission that banks plan to introduce when issuing a market mortgage. If the deal on primary housing, it is taken from the developer, if the secondary - from the buyer-individual. The size of the commission is 6.5%.
An obvious alternative, in the opinion of Julia Makarenko, is installments.
- The share of such transactions from 5-10% of the market has grown to one third and continues to grow, - she continues. - Developers offer installments not for a year or two, as before, but for 5-8 years (some pay off the mortgage for just such a period). There is also a trend to reduce the down payment to 10% (previously - 50%). Such proposals are attractive in their affordability, although there is a chance of abuse by developers who may voice the price, initially higher than for those who buy for cash.
Demand structure
Even with the current unprecedentedly high debt load, the demand for market mortgages remains: it is about 35% of all transactions, said the publication managing partner of the analytical agency "VMT Consult" Ekaterina Kosareva.
- Apartments at such rates are purchased in situations where there is no other way out (creation of a family, urgent relocation, receiving an inheritance with further sale to improve their own living conditions). Usually, such borrowers expect to restructure the loan after the Bank of Russia softens its monetary policy, but as recent decisions of the financial regulator show, the requirements for borrowers are only getting tougher (clients with high debt load are simply denied a loan), - she says.
According to the analyst, those who take an apartment in the mortgage at very high rates and without much need, are not characterized by high financial literacy.
- At the moment, these are people who suddenly got hold of significant sums of money, in particular for their relatives' military service contracts, - she continues. - As a rule, they want to move from depressed regions closer to Moscow and are not interested in the size of overpayments, but they are able to pull monthly payments, at least for now. And if they are Muscovites, they are interested in real estate in other regions in order to rent it out.
What will happen later with these huge monthly payments, they do not think. At the same time, Kosareva notes, citizens easily buy apartments, cars and villas for cash, which means that they do not take mortgages.
"Izvestia" sent requests to the Ministry of Economic Development and the Bank of Russia with a request to assess the likelihood of mortgage rate growth up to 50% per annum, but at the time of publication no answers have been received.
How the key rate changed
In 2023-2024, the Russian Central Bank's rate underwent significant changes caused by economic and inflationary factors. At the beginning of 2023, it was 7.5%, but by the middle of the year, inflation risks intensified, which required a tightening of monetary policy. In August 2023, the Central Bank sharply raised the rate immediately by 3.5 percentage points to 12%, and then in September it rose to 13%.
The year 2024 began with the key rate at 13%. This level was maintained until August 2024, when the regulator decided to raise the rate to 15%.
In September 2024, the rate was increased to 18% in the face of increasing inflationary pressures. This was a reaction to the growth of inflation expectations and the need to stabilize the currency market.
On October 25, the Central Bank increased the rate again to 21%, which was a record value in recent years. This decision was explained by the continued growth of inflation and the desire to limit domestic demand in order to curb price growth.
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