Russian Banks Are Refusing To Issue Mortgages
1- 16.10.2026, 11:54
- 1,546
This is a warning sign for the entire financial system of the Russian Federation.
Russian banks have begun to stop issuing mortgages to Russians due to the high costs of these programs and the associated risks. Over the past three years, the number of financial institutions issuing mortgages has fallen by more than 13%—from 249 to 216. This is according to Central Bank data analyzed by "Izvestia". The 33 banks that left the mortgage market are small and medium-sized. However, they have not closed and continue to operate in other areas.
It is becoming increasingly difficult for small lending institutions to compete with major players in the mortgage market, says Finam analyst Igor Dodonov. To attract depositors, they often have to offer higher deposit rates, which are factored into the cost of the loans they issue. This reduces the availability of favorable terms on market-rate mortgages for borrowers, and banks do not generate sufficient profit from government programs, which account for more than 50% of all loans issued. As a result, the mortgage market is becoming increasingly concentrated in the hands of the largest banks. According to Dodonov’s estimates, the top 10 players account for about 90–95% of new loans.
An additional risk for banks is the rise in delinquent debt, says Evgeny Shavnev of the Flip Group. As of September 1, 2026, Russians were behind on mortgage payments totaling 267 billion rubles. Banks are required to set aside reserves in case of defaults on non-performing loans, but it is difficult for smaller institutions to allocate additional funds for this purpose, Shavnev explained.
The main consequence of banks exiting the mortgage market is a reduction in options for borrowers. For example, lenders remaining in the market may tighten requirements for down payments, proof of income, and documentation, says Vasily Kutyn, director of analytics at Ingo Bank . The impact of banks’ withdrawal may be felt most acutely in small towns and remote areas, where there are fewer options to begin with, added Maria Ermilova, an associate professor in the Department of Sustainable Development Finance at Plekhanov Russian University of Economics.
However, a reduction in the number of lenders does not automatically mean an increase in mortgage rates: their level depends on the key rate, the cost of deposits, and the terms of preferential programs, notes Natalia Milchakova, lead analyst at Freedom Global. However, she says that in some cases, customers’ additional expenses may rise—for example, if a favorable rate requires the purchase of additional banking products.
In the near future, banks will continue to exit the mortgage market, according to independent economist Viktor Mangazeyev. He forecasts that by the end of 2027, the number of institutions issuing home loans will drop to 200. A cut in the key interest rate—which would make loans more affordable for borrowers—could slow this process, suggested Valeria Popova , a senior analyst at Ricom-Trust .
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