The Ministry of Finance decided to save on budget expenses
The Ministry of Finance of the Russian Federation proposed increasing the rate on family mortgages for families with two minor children from the current 6% to 12% per annum after July 1, when the state program ends . According to experts, the initiative is beneficial only to banks and the state. It will not help young families solve their housing problem, because a loan for them will cost twice as much.
“The family mortgage at 6% will be extended for families with children under six years old,” said Deputy Finance Minister Ivan Chebeskov. According to him, the government is currently discussing the initiative; no decisions have been made yet. Options are also being considered to reduce the rate if more children are born or increase the rate if no children are born.
We would like to remind you that the preferential family mortgage program expires on July 1, 2024. Now the rate on such loans is 6% per annum with a minimum down payment of 20%. Families with one child born from January 1, 2018 to December 31, 2023, two or more children under 18 years of age, or a child with a disability can take out a loan.
According to DOM.RF, in 2023, family mortgages became the most popular: its share in the total number of preferential loans reached 46% (plus 10 percentage points by 2022). About 429 thousand family mortgages were issued.
In April, Russian President Vladimir Putin instructed the government to extend the validity of the family mortgage program until 2030, providing for maintaining the rate at no more than 6%. According to the Ministry of Finance, in 2024, additional state budget expenses for extending the family mortgage program, taking into account the increase in the key rate, will amount to approximately 260 billion rubles. And by 2030, according to the department’s calculations, 1.5 trillion rubles will be required.
The Ministry of Finance's proposal caused a mixed reaction among experts. According to a leading analyst at Freedom Finance Global, this initiative will not help young families solve their housing problem, but will only worsen the situation for them, since a loan will now cost them twice as much. In addition, not every young family is able to afford a down payment of 20% of the cost of housing. And the maximum loan amount is 6 million rubles. also, to put it mildly, a poor assistant in improving well-being. To buy more or less decent housing, especially in a large city, a young family will have to take out two loans at once.
However, most likely, this initiative of the Ministry of Finance in the State Duma will most likely be supported in the wake of the fight against excessive debt, the analyst believes. “After all, the higher the interest rate on a family mortgage, the fewer people will apply for such a loan. And, apparently, the authorities hope that the number of borrowers will decrease, which means that the burden on the state budget will also decrease,” Milchakova noted.
“Increasing the interest rate on family mortgages to 12% will only benefit banks and the state. And if we take into account the full cost of the loan, then the real interest rate on these loans will be even higher,” Andrey Loboda, economist and director of communications at BitRiver, noted to MK. But, on the other hand, in his opinion, it is good that this program is not canceled, and the increased interest rate will help cool the overheated mortgage market.
According to Loboda, along with increasing the mortgage interest rate, the maximum loan size should also be increased, because 6 and even 12 million rubles. will not allow a family with children to really improve their living conditions. With that kind of money you can only buy a studio or a small one-room apartment, or, in extreme cases, a small-sized “two-room apartment” on the outskirts of a big city or even in the suburbs. And this is called improving living conditions? Or a young family will have to take out a second loan to buy a larger apartment, but at the same time tighten their belts.
To really improve the living conditions of young families, it is advisable to develop industry-specific mortgages for a larger number of enterprises and sectors of the economy, not only for the IT sector, says Loboda. For example, workers in the domestic automobile industry, aviation industry, and shipbuilding have also earned the right to preferential mortgage programs. And such a support measure can stimulate the influx of personnel into these industries.
As an alternative measure to help young families, in Milchakova’s opinion, it is possible to offer long-term rental housing from the city or private owners with the right to purchase housing over time. Since mortgage interest rates will remain high for an indefinite period of time, such a measure may be well-requested by those who need separate, quality housing. “A country mortgage is also a good idea. In this case, many families would be able to meet a budget of no more than 6 million rubles,” the analyst concluded.