Analysts say Russia’s mortgage market is recovering, led by a rebound in home loans issued at market rates. But mortgage arrears are rising sharply too. Over the past two years, overdue housing debt has increased 3.5‑fold to above RUB 223 billion.
According to preliminary estimates from the DOM.RF Analytical Centre, banks issued 84,000 housing loans in April worth a combined RUB 359 billion, up 4 % from March 2026 and 24 % from April 2025.
Market-rate mortgages drove the growth. In April, the number of such loans rose 5 % from the previous month to 48,500, while their total value increased 6 % to RUB 149 billion. By comparison, banks issued more than 35,000 subsidised housing loans worth a combined RUB 210 billion in April. Market-rate mortgages therefore accounted for 58 % of total lending, 11 percentage points higher than at the end of the first quarter of 2026.
Analysts say the recovery has been driven largely by lower market rates after the Central Bank cut its key rate. In April, average mortgage rates fell to 19.22 % on new-build homes and 18.84 % on existing properties.
Banks are also reporting a revival in market-rate mortgage lending. Sberbank issued RUB 255.7 billion in mortgages in April 2026, up 11 % from March, according to its Domclick service. Of that total, RUB 99 billion was issued under market-rate programmes, 17 % more than in March 2026 and four times the level recorded in April 2025. Subsidised programmes accounted for RUB 156.7 billion, up 8 % from March 2026. VTB analysts said market-rate mortgages made up 45 % of the bank’s mortgage lending in April.
Yet as demand for housing loans recovers, mortgage arrears continue to climb. According to the Central Bank, overdue mortgage debt exceeded RUB 223.7 billion as of April 1. Since the start of the year alone, arrears have risen by RUB 16 billion. They have doubled over the past year and increased 3.5-fold since April 2024, when overdue housing debt stood at RUB 63.8 billion, Central Bank data show. Nearly a third of all missed payments are concentrated in the Central Federal District, mainly in Moscow and the Moscow Region.
Other estimates point to an even sharper deterioration. According to the Scoring Bureau, the number of mortgages more than 90 days overdue topped 100,000 for the first time at the end of March, up 4.6 % from February 2026 and 1.5-fold from March last year. In value terms, overdue debt hit a record RUB 310.8 billion, a 1.7-fold increase over the year.
The regulator has partly acknowledged the problem, linking it to the maturing loans issued in large volumes during the 2023-24 mortgage boom. As time passes, some borrowers were expected to struggle with repayments. ‘In mortgages, the share of problem debt rose from 1 % to 1.7 % last year and to 1.8 % as of April 1, 2026. Although the figure has almost doubled, it remains low by historical standards. The problems have matured on loans issued amid a rush for mass subsidised mortgages. People hurried to use the preferential programme and some overestimated their ability to repay,’ Elizaveta Danilova, head of the Central Bank’s financial stability department, told the media. By comparison, problem debt almost reached 4 % in 2016 and exceeded 6 % in 2009.
Danilova said Russians were broadly keeping up with their mortgage payments. At the start of 2026, almost 10 million people in Russia had housing loan debt, including co-borrowers.
‘Of those 9.9 million people, only 228,000, or 2.3 %, have overdue mortgage payments,’ the Central Bank official said.
The Central Bank, led by Elvira Nabiullina, says it uses risk-weight add-ons to regulate the mortgage market, pushing banks to set aside more capital when they issue riskier loans. By mid-2025, banks were issuing 8 to 10 times fewer such loans than in the previous two years.
‘We therefore set the limits at a level that did not impose additional restrictions on banks. On the contrary, we reduced the add-ons, lowering the capital burden on mortgage lending,’ Danilova said.
As a result, borrowers spending more than 80 % of their income on debt repayments accounted for just 4 % of housing loans issued in the first quarter, while low-down-payment mortgages made up less than 1 %.
Those measures, however, apply only to new loans, while arrears are building up mainly on older mortgages.
In its Analysis of Trends in Retail Lending, published last week, the Central Bank said arrears on mortgages issued in Russia in 2025 were lower than on loans granted in 2024. At the same time, the average mortgage debt held by Russians rose to RUB 4.2 million. Last year, 10 million people had mortgages, 4.5 million of whom had no other loans. Family mortgages accounted for more than half of new lending.
Experts say the increase in arrears is the legacy of riskier lending in 2022, 2023 and 2024, when borrowers took out low-rate subsidised mortgages at the limits of their financial capacity and misjudged their ability to repay. Svetlana Opryshko, director of the Vseostroike.rf property portal, does not rule out a further rise in arrears this year.
‘The reasons remain the same: inflation and high rates continue to weigh on borrowers. But once the market revives, rates start to fall and the mortgage portfolio begins to grow actively, the share of overdue debt will start to decline,’ she said.
The recovery in mortgage lending and the rise in arrears are separate trends that can run in parallel, said Oleg Repchenko, head of research at IRN.RU, a property market data portal.
‘Market-rate mortgages are growing thanks to new borrowers, while arrears are the legacy of previous years, when people took out ‘cheap’ mortgages with minimal down payments, sometimes more than one, at the limits of what they could afford. Now, after a prolonged period of high rates and falling real incomes for some households, those loans are starting to unravel,’ he said.
Experts say that even if overdue mortgage debt doubles again, it would still remain at an acceptable level. But such an increase would make banks more likely to reject mortgage applications. If lenders currently turn down two out of four applicants, rising arrears could push rejection rates to three or four out of five.
Even so, 228,000 problem housing loans represent a sizeable volume for the secondary housing market. Such properties are typically sold at a 10-20 % discount to market prices.
‘In the budget segment, these properties will put selective downward pressure on prices. And if several dozen repossessed flats are put up for auction in a single region at the same time, it could create a local imbalance,’ said Evelina Ishmetova, founder of the School of Developers.
‘Property buyers are showing growing interest in repossessed homes. But it is too early to talk of a surge in transactions or any significant impact on the wider market. The main attractions are lower prices for existing homes and the chance to buy from a verified seller without paying commissions to estate agents or other intermediaries. For now, however, demand is likely to remain moderate: high interest rates and high prices per square metre are still weighing on buyers, regardless of who is selling,’ said Svetlana Opryshko, director of the Vseostroike.rf portal.
In 2025, more than 2,000 such properties, including flats, rooms and property shares, were sold at auction as part of enforcement proceedings, down by a third from the previous year, according to experts at debt collection agency Dolgovoy Consultant. The average lot price at auction rose by 15 %, while creditors recovered a total of RUB 6.75 billion through such sales. Experts attributed the fall in auction sales to borrowers have become less likely to allow missed payments to reach the enforcement stage. They estimate that banks own more than 5,000 residential properties currently up for sale, a figure expected to keep rising.
ORIGINAL: NG/Key Rate Cut Breathes Life Into Russia’s Mortgage Market
