Estimated earnings required to purchase a two-bedroom flat in Moscow
Qualifying for Mortgages in Russia's Major Cities
In the current market conditions, the income required to secure a mortgage in major Russian cities varies significantly. According to a report by RBC, the average price for a two-bedroom apartment in a new building in Moscow stands at 19.39 million rubles, requiring a monthly mortgage payment of approximately 316,700 rubles. Consequently, to meet this mortgage obligation, an individual would need an income of at least 527,900 rubles per month.
St. Petersburg follows closely, with income requirements amounting to 413,900 rubles, whereas in Kazan, the figure drops to 320,500 rubles. By contrast, the cities of Volgograd, Voronezh, and Chelyabinsk display lower income requirements of 170,000 rubles, 175,000 rubles, and 181,300 rubles respectively.
Citizens looking to meet these income thresholds would typically need to earn an income equal to three to five times the average salary in the region. This suggests that a family of two working adults, each earning an average salary, would struggle to afford a mortgage on a two-bedroom apartment in a new building.
In light of these high income requirements, many banks have lowered mortgage rates in early March. For instance, Sberbank reduced rates by 1-1.5%, with the minimum rate applicable to transactions on the secondary market at 27.6% for a 50% initial down payment. Meanwhile, VTB announced a reduction of 0.5-1 percentage point, with the minimum rate set at 27.8% per annum, available with comprehensive insurance and income confirmation.
Vladislav Fadeev, director of the Center for Economic Forecasting at Gazprombank, noted that mortgage rates in Russia peaked amid expectations of further key rate increases. However, the trajectory of the key rate is now more predictable, with no imminent expectations of a sharp increase. The next meeting of the Bank of Russia's board on the key rate is scheduled for March 21.
Notably, foreigners may encounter higher income thresholds and higher interest rates when securing a mortgage in Russia. Meanwhile, subsidized mortgage schemes are available for Russian citizens but are generally exclusive to them.
In summary, qualifying for a mortgage in Russia depends on various factors; however, larger cities like Moscow and St. Petersburg present higher income thresholds. Smaller cities usually have lower requirements but can still vary based on the lender and property specifics. As banks gradually lower mortgage rates and the trajectory of key rates becomes clearer, potential homebuyers in Russia may find mortgage ownership more attainable.
In the realm of personal-finance, an individual aiming to secure a mortgage in Moscow would need an income of at least 527,900 rubles per month, which is three to five times the average salary in the city. Similarly, St. Petersburg requires an income of 413,900 rubles, indicating a significant financial commitment for personal-finance management.
