Foreign currency mortgage: regulator’s recommendations
According to borrowers’ requests, which will be submitted until 31 May 2022, it is recommended to convert foreign currency mortgages into Russian rubles at the official exchange rate as of 18 February 2022. The recalculation of liabilities should not deteriorate the borrower credit history as reported in the Bank of Russia’s information letter to credit institutions.
The regulator’s recommendations state that, first of all, banks should pay attention to loans which comply with the following conditions:
- the outstanding debt as of 1 February 2022 did not exceed 150,000 US dollars or an equivalent amount in another currency at the official exchange rate;
- the loan was issued before 22 February 2022 for the purchase of housing which is the only residential property of the borrower in Russia; and
- the debt is overdue for no more than 120 days at the time of the borrower’s request.
According to the Bank of Russia, about 60% of the total number of mortgage loans issued in foreign currency meet these criteria. As of 1 February 2022, 2,011 mortgage loans in foreign currency remained outstanding with the overdue debt on these loans amounting to 16.64 billion rubles (0.14% of the housing loan portfolio). These are mainly loans issued before 2014.