The volume of overdue debt on mortgage loans increased by 9.6% in a month, the amount of bad mortgage has almost doubled (+96%) over the first three months of this year, the Central Bank of Russia (CBR) reports.

As of May 1, the volume of overdue debt amounted to RUB125.5bn ($1.38bn), up RUB11bn in a month, the central bank said in a recent report.

As of the first quarter of 2025, the total volume of outstanding mortgage debt in Russia was approximately RUB17.9 trillion ($197.8bn) according to data from the CBR.

Russians are suffering from the high prime interest rates, currently at 21%, which has increased the cost of borrowing across the board. And bad mortgage debt is unusual, typically staying at low levels since the mortgage business took off in the boom years in the noughties.

However, despite the sharp uptick in overdue payments, the overall volume of non-performing loans (NPLs) remains low at 0.7% of the total outstanding mortgage debt and Russia is in no danger of facing a real estate crisis anytime soon.

At current rates, it will take 15 months for bad debt to reach 5% of the total. For comparison, the 90-day delinquency rate on US mortgages during the global financial crisis in 2008 was 5%.

At the current growth trajectory, the bad debt will double every 7-13 months, say experts.

The CBR hopes that its austere tight monetary policy will pull inflation down soon and that it will be able to start reducing interest rates soon. The CBR has adopted non-monetary policy methods to reduce growth and cool the economy that is starting to take effect, although inflation has stubbornly remained at around 10% for months.

The Russian economy, which was growing at 4.5% per year at the end of 2024, not only slowed down by the summer of 2025, but also found itself on the brink of recession, as the economy contracted in real terms in the first quarter  of this year, despite putting a nominal 1.4% of growth, according to the latest data. But with unemployment at a historic low of 2.3% of the population and nominal wages still rising by circa 12% – faster than the rate of inflation – everyone still has a job and are seeing their real wages increasing.

It is not clear where the economy will go from here, with some predicting a wave of bankruptcies last this year, while other say the economy is more robust than it looks. And the slowdown comes as no surprise for the CBR, which predicted a dramatic cooling off of the economy in 2025 in a pessimistic macroeconomic forecast released last August.