Dozens of Russian banks have refused to issue mortgages to the public

Russian banks have begun to stop issuing mortgage loans due to the significant costs of these programs and the associated risks. Over the past three years, the number of financial institutions offering mortgages has fallen by more than 13%—from 249 to 216. Thirty-three small and medium-sized banks have exited the mortgage market. However, they have not ceased operations and continue to operate in other areas.

As Finam analyst Igor Dodonov explained, it is becoming increasingly difficult for small lending institutions to compete with major players in the mortgage market. To attract depositors, they often have to offer higher interest rates on deposits, which increases the cost of loans. As a result, banks have fewer opportunities to provide loans on favorable terms at market rates. At the same time, under government programs—which account for more than 50% of all mortgages issued—banks’ profits remain insufficient. As a result, the market is becoming increasingly concentrated in the hands of the largest financial institutions. According to Dodonov’s estimate, the top ten players account for about 90–95% of new mortgage loans.

Another risk for banks is the increase in delinquent debt, noted Yevgeny Shavnev, a representative of the “Flip” group of companies. As of September 1, 2026, Russians had fallen behind on mortgage payments totaling 267 billion rubles. If these non-performing loans are not repaid, banks are required to set aside reserves. However, smaller institutions find it difficult to secure additional funds for this purpose, Shavnev explained.

The main consequence of banks exiting the mortgage market will be a reduction in options for borrowers. According to Vasily Kutyn, director of analytics at Ingo Bank, institutions that remain in the market may tighten requirements regarding down payments, proof of income, and the list of required documents. This may be felt most acutely in small towns and remote regions, where there are already few options available, added Maria Yermilova, an associate professor in the Department of Sustainable Development Finance at Plekhanov Russian University of Economics.

At the same time, a reduction in the number of lenders will not necessarily lead to an automatic increase in mortgage rates. As noted by Natalia Milchakova, a leading analyst at Freedom Global, mortgage rates depend on the key interest rate, the cost of deposits, and the terms of preferential programs. However, in some cases, customers’ additional costs may rise. For example, to qualify for a favorable rate, a bank may require customers to purchase additional financial products.

Independent economist Viktor Mangazeyev believes that banks will continue to exit the mortgage market in the near future. According to his forecast, by the end of 2027, the number of institutions issuing home loans could drop to 200. A cut in the key interest rate—which would make loans more affordable for borrowers—could slow this process, suggested Valeria Popova, a senior analyst at Ricom-Trust.