Bashkortostan experience in housing savings should be extended to other regions - Central Bank head

The head of the Bank of Russia Elvira Nabiullina stated the need to legislatively create the basis for wider application in the regions of the housing savings mechanism currently being implemented only in Bashkortostan and the Krasnodar Territory.

“There are several interesting ideas, practices in Bashkortostan, the Krasnodar Territory, where the housing savings mechanism is used. Under this mechanism, people accumulate funds for a down payment in a special account and, at a certain level of savings, a person receives a mortgage on those conditions that were originally determined. On the one hand, the bank receives sustainable funding in the form of savings and mortgage rates can be even lower than usual,” she explained at a meeting of the Council for the Financial Market Development under the Federation Council. “In regions where this mechanism is used, now mortgage rates with housing savings are about 6-7%. In our opinion, the time has really come to legislatively create the basis for wider application of such experience in other regions.”

A similar point of view is shared by the Chairman of the Federation Council, Valentina Matvienko, who believes that not all mechanisms for supporting mortgages have been applied.

“Housing savings agreements combining elements of a bank deposit and a mortgage loan will be able to increase housing affordability for citizens,” Valentina Matvienko emphasized at the meeting. “This practice already exists in some regions, in particular, in the Republic of Bashkortostan.”