CBR lifts TIC restriction for mortgages until end of Q1 2025, might scrap it altogether

MOSCOW. Oct 11 (Interfax) - The board of the Central Bank of Russia (CBR) has decided to lift the restriction on true interest cost (TIC) for bank mortgages to purchase a home or land, the CBR said in a press release.

"This decision will enable banks to reflect in mortgage rates the latest changes in the situation in the main segments of the financial market, including those shaped by decisions on the key rate, without the risk of violating the requirements of the law for maximum TIC. This way borrowers will continue to be able to receive mortgage loans, although at higher rates, but without additional inflation of housing prices," the CBR said.

The risk of mortgage borrowers increasing their debt burden will be mitigated by existing macroprudential buffers, the CBR said.

The CBR also said it is considering lifting TIC restrictions in mortgage lending on a permanent basis so that mortgage lenders can better adapt to changing market conditions.

The TIC restriction remains in place for other products of lending institutions and all loans from payday lenders, credit consumer cooperatives (including agricultural ones) and pawnbrokers.