Mortgage rates fell to a new low

the Average rate on mortgages in Russia in may 2020 reached a new historic low of 7.4%, said the Chairman of the Bank of Russia Elvira Nabiullina, speaking in the Duma.

“mortgage rates are falling, and our preliminary data suggest about it. We while this figure is not articulated, but in may the rate on your mortgage is 7.4 percent”.

According to Nabiullina, the decrease in the average rate was influenced by the preferential mortgage. “About a third of the loans issued just at a reduced rate of 6.5%,” — said Nabiullina.

the Rate is reduced and consistently each time it updates the minimum since November of last year. The previous record was in April. The weighted average interest rate on mortgage loans in April declined from 8.6% to 8.32% per annum, according to the Bank of Russia.

in Addition to a discounted mortgage at the average rate affects the Central Bank’s policy. The controller successively reduces the key rate, which leads to lower retail rates from banks.

the Bank of Russia on 19 June 2020 lowered its key rate for the first time to 4.5% per annum. “Given the cuts in the key rate since the middle of last year — let me remind you, since last June we have reduced the key rate from 7.75% — credit resources for the enterprises and the population should become cheaper,” — said the head of the Central Bank. According to her, the reduction of the key rate does not increase above the target level of 4% and does not invalidate the salary savings. Sberbank predicts the reduction of the key rate of the Central Bank to 4% by the end of September. Investment Bank Goldman Sachs expects a gradual decline in Bank of Russia key rate to 3.5%.