Official: Russia not to prolong state support of mortgages in 2017

NOVO-OGARYOVO, Moscow Region, Feb 1 (PRIME) -- The Russian government has decided not to prolong a program to subsidize interest rates on mortgage loans in 2017, First Deputy Prime Minister Igor Shuvalov said Wednesday at a meeting of government members with President Vladimir Putin.

“Quite serious stabilization on the financial market with that low inflation that we have for 2016. The government has decided that we will not continue this program, because commercial banks already offer mortgage rates of 12% and lower now,” he said.

“As part of the anti-crisis plan we were striving for the rate not to exceed 12% for a borrower. When we were making a decision on subsidization, banks were offering from 15% to 20% annually. This was almost impossible,” Shuvalov said, adding that the subsidization program was quite effective.

He said he hoped Russian banks will reduce mortgage loan rates in 2017 as the central bank cuts its key rate.

Russian banks provided 862,000 mortgage loans in 2016, while in 2017, the number could exceed 1 million, Shuvalov also said.

Overdue debt on mortgage loans does not exceed 2.8% of the combined mortgage loan portfolio, and the government is not concerned with this figure, he added.

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