Russia’s Sberbank raises mortgage rates to 20%

Russia’s largest lender, Sberbank, will increase its market mortgage rates to a minimum of 20 per cent starting Tuesday, according to the RIA state news agency, citing a Sberbank press release.

This decision follows the Russian central bank’s move last month to raise its key interest rate by 200 basis points to 18 per cent.

For the primary market, the minimum interest rate will be set at 20.3 per cent when using life insurance, the Mortgage Plus promotion, and a down payment of 20 per cent or more, according to Sberbank’s press service.

The central bank’s sharp rate increase in July was accompanied by warnings of continued policy tightening. The bank’s head cautioned that the Russian economy has entered “very stormy, uncharted waters.”

German Gref, head of Sberbank, also warned last month of a significant slowdown in lending growth expected in the second half of the year. Russia’s resource-rich economy, largely cut off from major Western financial services following its full-scale invasion of Ukraine in February 2022, has been significantly impacted by the ongoing conflict.

Attribution: Reuters