The Bank of Russia has been granted the authority to impose macroprudential limits on mortgage and car loans issued by banks and microfinance organizations (MFOs). This development follows the adoption of relevant legislation by the Federation Council on November 20.
These limits aim to curb household over-indebtedness and mitigate risk accumulation among banks and MFOs. Similar macroprudential measures have been in place for unsecured consumer lending since 2023, resulting in a significant reduction in the proportion of new risky loans within that segment.
Risky mortgage loans are identified as those where borrowers allocate more than half of their income to debt servicing or make minimal down payments. Additionally, the regulator plans to restrict new mortgage loans exceeding a 30-year term, due to potential assessment challenges faced by banks at issuance.
The implementation of mortgage limits will occur in two phases. Limits on loans for purchasing new and ready flats will take effect from July 1, 2025. Meanwhile, restrictions on facilities for constructing new homes and other property-secured loans will commence from January 1, 2026.
The Bank of Russia will determine these limits based on prevailing conditions in the mortgage market and project finance sectors, aiming to maintain an appropriate balance between risk management and retail lending affordability.