A little bit of good: what are the risks of installments from the developer
The widespread sale of apartments in installments from the developer carries risks for buyers, said the head of the Central Bank Elvira Nabiullina during a press conference. According to her, the share of apartments sold using installments from the developer has grown from 20 to 40%. However, it is still difficult to regulate this situation: installments are not a credit product. Izvestia found out what traps a buyer can fall into in such transactions and what developers risk.
Sharp growth
The share of installments from developers instead of mortgages has grown, this worries the Bank of Russia, said the head of the regulator Elvira Nabiullina.
"We do see that the market has increased the share of transactions that are called "installments from the developer", that is, not a loan from the bank, but installments from the developer. We see that the share of installments from the developer in sales has increased from 20 to 40%," she said.
As explained by the head of the Central Bank, there is a concern that "the widespread use of these schemes creates risks for both buyers and developers themselves".
As Nabiullina explained, the installment is limited in time. It is issued under the promise to take a loan in the future, although no one has guaranteed a mortgage loan to the buyer, especially at a low rate.
Term and rates
The short term of installments is considered by experts to be one of the main financial risks borne by the buyer.
Most developers set the term of installments 1-3 years, which leads to high monthly payments. For example, if the cost of the apartment is 5 million rubles and the installment for 24 months, the payment will be about 208 thousand rubles per month, excluding interest. Failure to make a payment on time can lead to penalties, higher interest rates or termination of the contract, says Maxim Naumov, a certified real estate specialist at the Guild of Moscow Realtors.
- Usually during the time designated in the contract, the buyer makes contributions. For example, for two years he pays 40-100 thousand a month. However, after two years it is necessary to repay a significant part of the debt, for example 40%. In this case, there is a risk of disruption of the terms of commissioning of the house, as a result of which the buyer will not be able to get the keys to the apartment in the originally agreed terms, and the costs of repayment of installments are not reviewed, - adds Vladislav Plitin, senior financial advisor of IC Fontvielle.
The risk is also associated with the execution of a mortgage loan to repay the remaining part of the debt.
- Conditionally, in two years, 60% of the cost of housing must be paid from borrowed funds. Predict the conditions on which the loan will be possible, it is impossible, as it is not clear whether there will be a reduction in interest rates, which many property buyers hope for, whether there will be preferential programs, such as family mortgage, and what will be the requirements for borrowers in general, - gives an example analyst.
Weakly protected
Lawyers also point to more significant legal risks that the buyer of real estate in such a scheme.
- The main risk for the buyer is that the installment from the developer is legally formalized as a contract of sale with deferred payment, and not as a loan agreement, which means that there is no protection provided by the law on mortgage. If there is a loss of solvency, the buyer can lose not only the money paid in, but also the right to the home. There is also a risk of double sales and under-construction, as the mechanism of project financing with escrow accounts does not work in this case," says Venera Shaidullina, founder of the legal ecosystem "Initiator".
The absence of escrow accounts (unlike mortgages) and the fact that installment payments are usually received directly to the developer, fraught with the fact that in the event of bankruptcy of the company or the freezing of construction to return the funds is extremely difficult, stresses Maxim Naumov.
The expert also draws attention to other legal traps that a buyer may fall into. This is, firstly, the risk of changing the price of a square meter: some contracts tie the cost to the market price at the time of the next payment, which can lead to an unexpected increase in payments. Secondly, penalties: a delay of even a few days often entails fines of up to 0.5% of the debt amount for each day. Finally, the lack of registration of ownership: until full payment is made, the apartment remains in the ownership of the developer, which limits the possibilities of the buyer (for example, you can not register or rent the housing).
Debt bondage
Installment payments are a debt burden on the buyer. However, the data on this debt is not transferred to the BCI, which means that banks will not be able to qualitatively assess whether he will be able to service other loans. This is a direct path to over-crediting due to unrecorded load.
"We in banks regulate such risks - preventing over-crediting - through debt load indicators. Here this debt load is not practically taken into account," Elvira Nabiullina pointed out.
Unlike mortgages, where the bank carefully checks the solvency of the borrower and evaluates the object itself, there are no such protection mechanisms in installments. This leads to situations when the buyer takes on unsustainable obligations, and in case of financial difficulties cannot restructure the debt or sell the apartment without the consent of the developer, says Danila Ladnyuk, financier, founder of the family office of D1 Capital.
Overpriced
Another important aspect is the cost of real estate. Developers often compensate for the lack of interest on installments by inflating the price of the object.
This reduces the potential for future resale, and in some cases leads to losses. For example, an apartment bought for 5 million rubles may be valued by the market at 4.5 million after the building is commissioned, explains Maxim Naumov.
Developers put in the price of potential risks of non-payment, so an apartment in installments is often more expensive than when buying for cash or even a mortgage. At the same time, the buyer does not receive any tax deductions, and the terms of repayment in case of withdrawal from the contract can be extremely unfavorable, adds Danila Ladnyuk.
No money
From the developers' point of view, the risks are related to cheap financing: they actually do not receive the "live" money needed for construction.
When using installment payments, developers do not fill escrow accounts. And this, as the head of the regulator explained, is fraught with the loss of preferential project financing received for construction projects from banks.
At the same time, real estate developers actually take on the functions of banks, without having the appropriate competencies in assessing the solvency of clients and managing credit risks. In case of mass non-payments this may lead to problems with construction completion, adds Venera Shaidullina.
Not according to the standard
Since the beginning of 2025, Russia has a standard for the protection of mortgage borrowers, prohibiting, for example, mortgages with cashback. The buyer must pay the entire down payment from his own funds. Also prohibited is subsidized mortgages from developers, when the cost of housing is artificially inflated.
However, as Nabiullina admitted, the standard does not apply to the relationship between people and developers, and the Central Bank does not see how it can be extended to other participants in the real estate market. According to her, it is important that the installment as a product itself does not contain hidden overpayments and commissions.
The difficulty in regulating installment payments is that formally it is not a credit product, but a special form of sale and purchase agreement. The Bank of Russia can only regulate financial organizations and credit products, but has no authority to interfere in civil law relations between a developer and a buyer, lawyers explain. Thus, changes in legislation will be required to regulate installment payments.
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