Over half of mortgages issued for 25+ years: review of CHB data
In 2023 H2, the proportion of mortgage loans issued for over 25 years grew to 57%, as evidenced by data received from credit history bureaus (CHBs). Moreover, the term of 15% mortgage loans exceeded 30 years.
The borrower’s age at the moment of loan repayment also increases: 42% of mortgages taken out in the second half of the year will be repaid by borrowers aged over 65.
The proportion of mortgages where borrowers could make down payments using consumer loans remains moderate at 6.3% just as in the previous year.
There are increasingly more households who have at least one consumer loan apart from a mortgage loan. Over 2023, the number of such households increased by 1.1 million. To mitigate the risks of mortgage debt burden, the Bank of Russia raised macroprudential add-ons on 1 March 2024.
Concurrently, macroprudential limits operate effectively in unsecured consumer lending. The number of borrowers taking out cash loans stopped growing upon reaching 24 million. The average loan amount decreased.
Meanwhile, credit cards are getting increasingly popular among individuals whose number has exceeded 27 million. The Bank of Russia expects that thanks to the limits and add-ons, the risks of individuals’ excessive debt burden will be gradually reduced.
More details are available in the information and analytical commentary Analysis of Retail Lending Trends Based on Credit History Bureaus’ Data for 2023 H2.