Russia's Finance Ministry Overhauls Family Mortgage: Rates to Range From 2% to 12% Based on Number of Children

The new terms, announced by the Finance Ministry, take effect Oct. 1 and replace the single 6% annual rate that had applied to all participants since the program began.

Families with one child will see their rate rise. In most regions the rate will be 10% with a maximum loan of 6 million rubles. In Moscow, the Moscow region, St. Petersburg and the Leningrad region, it will be 12% with a limit of 12 million rubles.

Large families will get more favorable terms. Families with five or more children in the regions will be able to take out a loan at 2% with a limit of 10 million rubles. In the capital regions, the rate for them will be 4% with a maximum of 18 million rubles.

Families with three children in the regions will keep the current 6% rate, and those with four will get 4%. In Moscow and St. Petersburg, the rate for families with three children will rise to 8%, while for those with four it will remain at 6%.

The new terms will apply to families in which at least one child is under seven years old at the time the contract is signed.

Along with the rate changes, the Finance Ministry is introducing a maximum subsidization period for the preferential loan of up to 15 years. Banks currently issue loans at the reduced rate, and the budget compensates them for the difference with the market rate. The ministry did not specify what will happen to the borrower's rate after 15 years.

The rate for building a private house or completing one, as well as for buying land for subsequent construction, will remain 6% regardless of the number of children and the region.

The Finance Ministry said the changes will make the program "more targeted and demographically oriented."

The management of the developer Samolet previously reported that tightening the terms for families with one and two children would substantially reduce their ability to buy housing. According to the company's statistics, 40–45% of all family mortgage transactions were made by families with one child.

The Family Mortgage program has been in effect since 2018 and has been extended through the end of 2030. According to Finance Ministry data, more than 2 million families have received loans worth roughly 11 trillion rubles under it over that period.