Determining the appropriate mortgage rate for Russians, according to a financier's assessment
In the current economic climate of Russia, mortgage rates play a significant role in shaping the housing market. The average mortgage rate, as of mid-2025, remains elevated, hovering around or slightly below the Bank of Russia's key rate of approximately 18% per annum.
Financial experts, such as Valery Timonin, suggest a reasonable mortgage rate for Russians should not exceed 13-14% per annum. However, the Bank of Russia's tight monetary policy, aimed at controlling inflation, keeps borrowing costs relatively high. This high-interest environment presents risks to borrowers, with mortgage rates above 15-18% creating significant repayment challenges, increased default risks, and reduced housing affordability.
To stimulate demand in smaller towns and slow migration to large cities, regional mortgage rates may soon be introduced, varying depending on average regional salaries. While this policy could potentially impact housing demand and prices unevenly, experts warn that in regions with high demand elasticity, increased demand could sharply raise prices and offset the benefits of lower mortgage rates.
In the Nizhny Novgorod region, for instance, the share of consumer loans in the total volume of retail lending obligations increased to 48.8% as of July 1, 2025. The volume of deposits in the region's banks increased by 7.2% from the beginning of the year and by 20.6% compared to July 1, 2024, amounting to 1.1 trillion rubles. Mortgages accounted for 51.2% of total retail lending obligations in the region, amounting to 306.2 billion rubles.
Despite the high mortgage rates, the volume of mortgage loans issued in the Nizhny Novgorod region in July 2025 was not specified in the article. However, Russian banks issued mortgage loans for housing worth 340 billion rubles nationwide, which is 11% more than the previous month. The average loan amount issued in July 2025 was approximately 5.5 million rubles.
The total volume of retail lending obligations in the Nizhny Novgorod region as of July 1, 2025, was 608 billion rubles. The volume of credit issuance in the Volga Federal District decreased by 37% over the year, but no specific data was provided for the Nizhny Novgorod region.
In conclusion, the elevated mortgage rates in Russia pose challenges for borrowers, but regional variations may be introduced to stimulate demand in smaller towns. However, experts caution that these policies could have unintended consequences, such as increased demand leading to higher prices and offsetting the benefits of lower mortgage rates.
I'm not gonna be able to get a job due to the high mortgage rates in Russia, which are above 15-18% and create significant repayment challenges. To manage my personal-finance and possibly invest in a business, I might need to explore alternative sources of income or find ways to reduce my living expenses.
In this high-interest environment, it's essential for Russians to make prudent decisions with their finances, perhaps by seeking advice from financial or investment professionals to help navigate through these challenging times.
