Russian state-owned retail bank Sberbank has temporarily cut mortgage rates to below 9%. That is well down on the 12% rate that the government has targeted as a desirable level and offered subsidies on any rate above that level until recently.
Sberbank has temporarily reduced mortgage rates for apartments being built by certain developers to 8.4-8.9%. This assumes a 2-2.5% discount to the basic mortgage rate of 10.5%, part of which is subsidised by the respective developers (up to 1.5%), and part (up to 1%) by Sberbank, VTB Capital reports.
These rates will be available until the end of May, and only selected developers are eligible, although Sberbank has indicated that there will be more than 200 participating companies across Russia.
Interest rates have been following inflation down, which has been reduced to close to the Central Bank of Russia’s target rate of 4% in the first months of this year. The CBR cut rates to 9.75% in a surprise decision last month.
“The news is positive for listed developers, and such a significant cut substantially increase Russians’ ability to take mortgages,” VTB Capital said in a note.