Sberbank : Sber expects family mortgages to nearly double in number when new terms apply July 1

The number of family mortgages taken out might increase by 80% now that new terms have been applied to the government-backed program starting on July 1, 2021, SberIndex forecasts in its study Soft Mortgage: Results and Prospects.

New terms of the State Support 2020 program are effective from July 1, extending the program for another year and setting a borrowing limit of RUB 3 mn for all parts of Russia. While soft mortgages used to be available to families who had given birth to a second child after January 1, 2018, they apply to families with firstborns now, too. As before, the program is also available to parents who have a disabled child born before December 31, 2022.

Now capped at RUB 3 mn, the lower borrowing limit should slash the number of mortgages issued by approximately 60%, but this decline will in part be offset by more family mortgages taken out, the SberIndex study reads.

The wider terms of the soft family mortgage program increase the potential client base by 80%, from 2.5 million to 4.8 million Russian families. At the same time, the share of family mortgages in the overall pool of home loans might increase to 6.9% from 3.8%, according to our estimates. Russian families are gaining access to more opportunities to improve their living conditions. For instance, Sberbank offers these loans at a standard rate of 5.3%. For borrowers registering mortgages online, the rate starts from 5%, and with subsidies provided by a developer, the rate is 0.1% or higher.

Alexander Vedyakhin

First Deputy Chairman of the Executive Board, Sberbank

Sberbank notes that the demand for family mortgages is high. Since the program launch in February 2018, Sberbank has issued 56,900 loans and the aggregate portfolio has reached RUB 175.3 bn. As many as 16,100 mortgages worth RUB 57.5 bn have been issued year-to-date alone.