The Central Bank noted the deterioration of mortgage lending standards

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AK&M 01 December 2022 19:17

In the mortgage lending segment in the third quarter of 2022, there was a trend of outstripping growth in housing prices, supported not by an increase in borrowers' incomes, but by a softening of the financial conditions of the mortgage. This is reported in the materials of the Bank of Russia.

Scaling up concessional lending programs increases the difference in prices in the primary and secondary housing market. At the same time, lending standards are deteriorating: the share of loans with a down payment of less than 20% has increased from 37% to 48%, the Central Bank emphasizes.

If these trends persist, the Bank of Russia will tighten regulation: in terms of macroprudential measures, it may be necessary to increase the allowances for mortgage loans with high PD and low down payment, in terms of microprudential measures, to increase the requirements for the level of mortgage loan reservation, depending on the level of the effective rate.