Bank of Russia cancels TCC limit on mortgages until 31 March 2025

The Bank of Russia Board of Directors decided not to limit the total cost of credit (TCC) for consumer mortgage loans to buy (build) a house or a land plot issued by credit institutions from 10 October 2024 to 31 March 2025.

This decision will allow banks to adjust their mortgage rates to reflect the latest changes in the situation in the key segments of the financial market, including those that have occurred under the impact of the key rate decisions, without the risk of violating the lawful TCC limit. As a result, borrowers will be able to receive mortgage loans, albeit at higher rates, but avoid buying property at additionally inflated prices.

The risks of higher mortgage debt burden will be limited by the already existing macroprudential add-ons.

To ensure the better adaptation of mortgage lenders to changes in market conditions, the Bank of Russia is considering the possibility of cancelling the TCC limit on mortgages on a constant basis.

The TCC limit will remain applicable to other products of credit institutions and all loans from microfinance organisations, consumer credit cooperatives (including agricultural ones) and pawnshops.

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