Bank of Russia to update macroprudential requirements for mortgages
Following public consultations regarding the new version of Bank of Russia Ordinance No.
In particular, the draft stipulated that banks were obliged to apply risk-weight add-ons for new home mortgages, including during one year after the commissioning of the housing. A number of market participants were concerned that it would be technically difficult to implement such innovation. Accordingly, a new criterion has been added to the one proposed before. As a result, banks will have two options: to count one year from the receipt of a commissioning permit or from the date when the commissioned home is pledged against the mortgage loan.
The Bank of Russia has expanded the list of government programmes supporting mortgage lending that allow banks not to use risk-weight add-ons. This list will now include subsidised mortgage lending.1 Besides, the Bank of Russia has updated the conditions when the add-ons will not be used. Specifically, the new version provides for a stage-by-stage increase in the requirements for the minimum down payment: from 1 June 2023 — to 20% and from 1 January 2024 — to 30%.