Mortgage rates on downward path

In June 2017, Russian banks continued downward revisions of mortgage rates. The average weighted rate on ruble-denominated housing mortgage loans (HMLs) issued during one month totalled 10.94%, registering below 11.00% for the first time on record. Moreover, ruble-denominated HMLs secured by a pledge of claims under share construction participation agreements were issued at even lower rates: the average weighted rate for such agreements decreased from 10.71% in June to 10.53% in July 2017.

During the first seven months of this year, credit institutions issued 507.9 HMLs totalling 927.7 billion rubles, registering 20% growth year on year. As a result, the total value of HMLs has exceeded figures for the same period in 2014, a record-breaking year for HMLs issued.

From the start of this year to 1 August, the overall mortgage portfolio grew by 5.3% (to 4.7 trillion rubles), with the portion of foreign currency-denominated loans declining by 0.5 pp to 1.1% (54.0 billion rubles) of total outstanding HMLs. In addition, the share of overdue loans remained low, at 1.5% (72.8 billion rubles).