Putin extended the preferential mortgage program for a year

Putin proposed to extend the preferential mortgage for another year with a change in some conditions.

The President said that it was impossible to abruptly curtail the preferential mortgage program and that it would be extended with a change in the criteria.

• The preferential mortgage rate will be 7% instead of the current 6.5%.
• The maximum loan amount is 3 million rubles. Now the limits are 6 million rubles for the regions and 12 million rubles for Moscow and St. Petersburg.
• The exception is family preferential mortgage: it will retain the previous limits - 12 million rubles in Moscow and St. Petersburg, 6 million rubles in other regions. Putin proposed extending this program to families with one child if he was born after January 1, 2018.

A number of concerns about the extension of the preferential mortgage program were expressed by almost the entire economic bloc of the government. The head of the Central Bank, Elvira Nabiullina, called for the state program to be curtailed in time in order to prevent the “formation of bubbles” and stop the rise in housing prices. In autumn, Deputy Chairman of the Central Bank Olga Popova said that during the operation of the preferential mortgage program, real estate prices in the primary market in the leading regions (including Moscow and the Moscow Region) increased by 16%. The Ministry of Finance called for limiting preferential mortgages. Deputy Minister Aleksey Moiseev said that mortgages at too low rates would attract insufficiently solvent borrowers to banks, and their loans that were too “long” would create a bubble in the market and a “pyramid for the budget.”