Mortgage makes its entrance into the marketplace.
In a significant development for the Russian housing market, experts predict a further decrease in mortgage interest rates due to the Bank of Russia's easing monetary policy and declining inflationary pressures.
The Bank of Russia reduced its key rate by 200 basis points to 18.00% in July 2025, with projections indicating further decreases to around 12.0–13.0% in 2026. This key rate reduction influences bank lending rates, which have already shown some easing, and are forecasted to continue trending downward.
The impact on the mortgage market could include increased affordability of mortgage loans for consumers, potential growth in mortgage lending, and an increase in housing demand as borrowing costs decline. Given that Russian households currently set aside a significant portion of income to purchase property and real incomes are expected to grow, lower mortgage rates may stimulate more home purchases.
VTB and Bank "Saint Petersburg" announced a reduction in rates on August 5, with several other banks, including Sberbank, Alfa Bank, Gazprombank, PSB, Bank "Dom.RF", Sovcombank, and others, having already reduced their rates. The average weighted rate on market mortgages has decreased to 23.05% per annum over the last week of July to early August. Experts believe that market mortgage interest rates may decrease by another 1-2 percentage points in the near future.
However, monetary policy will remain relatively tight compared to many other countries for some time to ensure inflation targets are met, so interest rates will decline gradually. Olga Filipova believes that current interest rates have not yet reached the level at which active realization of pent-up demand may begin. Sergei Gordieiko thinks that a more significant increase in mortgage issuance under market programs can be expected when the interest rate falls to at least 15% per annum.
The volume of mortgage issuance in June was 64 billion rubles, the highest since January 2025. Despite this, most market participants are not ready to issue mortgage loans at a rate above 20% per annum. In several banks, the minimum rate has fallen below 20% per annum, including Sberbank, T-Bank, Bank "Saint Petersburg", and "UralSib".
The regulator's rhetoric before the next CB meeting on September 12 and the dynamics of macroeconomic indicators, particularly inflation, will be crucial in determining the future direction of mortgage interest rates in Russia. Overall, experts see the combination of easing monetary policy with slowing inflation and improving income trends as conducive to a more active and accessible mortgage market in Russia over the coming years.
- The Bank of Russia's key rate reduction and the subsequent decline in bank lending rates could potentially stimulate an increase in business activities in the finance sector, as banks may offer more attractive loan products to consumers.
- With the expectations of further decreases in mortgage interest rates and the increasing affordability of mortgage loans, there might be significant growth in the Russian housing market, leading to increased business opportunities in the real estate sector.
