As Russia grapples with mounting financial challenges, the Ministry of Finance has proposed a new set of measures aimed at stabilizing the preferential mortgage segment. The series of measures, which has been submitted to the government, include a reduction of the maximum loan size for preferential programs to 6 million rubles in Moscow, St. Petersburg, and the Moscow and Leningrad regions.
Proposed Changes to the Preferential Mortgage Structure
The Ministry of Finance has also proposed an increase in the minimum initial payment to 30% and a reduction of the maximum subsidy rate that banks can receive by 0.5 percentage points. This strategic move is designed to cool down the overheated mortgage segment.
To further streamline the mortgage loan process, the Ministry suggests limiting borrowers to just one preferential mortgage loan under a single preferential mortgage program. This is expected to prevent misuse and ensure that the program benefits the intended recipients.
Enhancing the Targeted Nature of Preferential Programs
In order to make these programs more targeted, the Ministry has also proposed the introduction of a ceiling on the maximum debt-to-income ratio (DTI) for borrowers availing preferential loans. A proposed limit of 50% for the DTI ratio is aimed at ensuring financial responsibility among borrowers. The Ministry is also considering the establishment of income requirements for citizens eligible for preferential loans.
Despite these significant proposed changes, the Ministry of Finance has declined to comment on the matter. This leaves room for speculation and further discussion about the potential implications of these changes on the preferential mortgage segment and the broader economy.
Implications for the Russian Economy
In a country where homeownership is highly valued, these changes could have a profound impact on the housing market and the broader economy. By cooling down the preferential mortgage segment, the government hopes to avoid a potential bubble and ensure sustainable growth. However, the effectiveness of these measures remains to be seen and will be closely watched in the coming months.