The Central Bank of the Russian Federation announced its decision to tighten the regulation of mortgage loans with a low down payment (below 20% of the cost of housing) from August 1, 2021, Russian media writes.
For loans starting from August 1, the premiums to risk ratios will increase to 50-100 percentage points from the current values of 20-80 percentage points, the Central Bank said.
The new measures indicate that banks will more often refuse loans to borrowed citizens, or offer higher mortgage rates with an initial payment of less than 20%. As the regulator notes, the risks of banks that are associated with a possible change in housing prices are limited by the level of collateral for the loan.
In addition, the down payment correlates with the frequency of default on loans and also characterizes the borrower. According to the Central Bank, in the first quarter of 2021, 24% of the volume of mortgage loans was issued to borrowers with a debt burden of over 80%.
