Three-fourths of borrowers properly resume their repayments after mortgage holidays

Furthermore, over 2,300 individuals have already managed not only to obtain, but also to complete their loan repayment holidays: 76% of the borrowers have successfully resumed their scheduled repayments.

In 2020, lawmakers adopted a new law allowing deferrals of payments on mortgage loans and other borrowings for individuals whose financial standing has deteriorated due to the coronavirus pandemic (Federal Law No. 106-FZ). Mortgage borrowers may apply to banks for payment deferrals or reductions in accordance with both laws, including in relation to the same loan. The new anti-crisis law simplifies the terms for obtaining such repayment holidays, but they may only be requested until 1 October 2020. Moreover, the maximum amount of a mortgage loan eligible to repayment holidays under Federal Law No. 76-FZ currently totals 15 million rubles, while the new law has enabled the Russian Government to establish the thresholds ranging from 2 to 4.5 million rubles depending on a region.

‘We believe that mortgage repayment holidays have become an efficient instrument providing additional time to borrowers for them to recover their solvency and subsequently continue their mortgage repayments as normal. Statistics prove that the borrowers are using the deferrals granted to them in a responsible way. Therefore, we have grounds to expect that the new mechanism offered will also help them overcome their temporary challenges that have emerged,’ said Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia.

The leading Russian regions by the number of requests received by banks are Moscow, Saint Petersburg, the Moscow Region, the Republic of Bashkortostan, and the Krasnodar Territory.

On average, banks satisfied more than 60% of the requests over the past year and 2020 Q1. A considerable portion of the applications received this year (approximately 20%) are currently under consideration (additional documents are required). As to refusals, the main reasons for them are borrowers’ failure to comply with the requirements of the law or submit all necessary documents.

In 2020 Q1, borrowers sent over 200 complaints to the Bank of Russia about banks’ refusals in mortgage repayment holidays. After scrutinising these complaints, the Bank of Russia has recommended seven banks to consider a range of borrowers’ requests anew. As a result, all these applications have been satisfied.