The Central Bank explained the reduction in the premium to mortgage risk ratios for banks

Due to the cessation of the growing gap in housing prices between the primary and secondary markets, it was decided to reduce the premium to the risk coefficients on mortgage loans. It is expected that with the entry into force of the new mortgage standard, this gap will gradually narrow, the press service of the Central Bank of Russia (CBR) told Izvestia on March 5.

The press service noted that since March 1, 2024, risk factor allowances have been tightened, which has led to a significant decrease in the share of loans granted to borrowers with high debt loads and low down payments. The more balanced growth rates of mortgage lending indicate a decrease in the rate of accumulation of risky loans by banks.

"Under these conditions, there is no need to accumulate a macroprudential buffer at the same rate," the Central Bank said.

The regulator also takes into account a wide range of factors, including the proportion of loans to borrowers with a high debt burden (PD) and low down payment, the prevalence of mortgage issuance practices with overestimation of the cost of housing, the quality of loan servicing, the rate of accumulation of risky loans, the stock of macroprudential capital buffer, mortgage losses by banks as part of stress tests, as well as the existence of practices to circumvent current regulation.

Payment visibility: The average mortgage cost dropped below 30% in early March

Why are housing loans getting cheaper and how will this affect the real estate market?

Earlier, on February 27, Alexander Perevoznikov, head of Tymy.Realty, told Izvestia about the changes in March for those who want to take out a mortgage. According to him, from the beginning of March 2025, the Central Bank of the Russian Federation will reduce surcharges to mortgage risk ratios for banks. The changes will affect mortgage loans with a down payment of 20% for borrowers with a personal income tax (debt burden indicator) of up to 70%. After the mortgage market cooled in the second half of 2024 and the entry into force of the Mortgage Lending Standard on January 1, 2025, which protects the rights of borrowers, the regulator considered that monetary policy regarding mortgages could be slightly relaxed.