Bank of Russia Governor Elvira Nabiullina presented the central bank’s annual report today at a State Duma session, a broadcast monitored by Novaya-Europe.
During her speech, Nabiullina criticized the scale of subsidized mortgages in Russia. She said that in both 2019 and 2024, roughly the same number of mortgage loans were issued — 1.3 million. However, while in 2019 there was only one subsidized mortgage for every 50 market-rate mortgages, in 2024 there were already two subsidized loans for every one market-rate loan.
“You may say that this is happening because market-rate mortgages are expensive. No, subsidized mortgages have displaced market-rate ones. Who would take out a market-rate mortgage if a subsidized one is available to them? And why should banks issue many market-rate mortgages if the credit risk they are prepared to assume in mortgage lending is being filled by subsidized loans?” Elvira Nabiullina said.
She also noted that this situation pushes up rates on market-based mortgages, because “if someone pays a low rate, someone else will pay a high one.” According to the central bank chief, the state should revise its approach to subsidized lending and make it more “targeted.”
In addition, Elvira Nabiullina said that in January 2026 Russia saw a sharp rise in inflation caused by increases in VAT, tariffs, and the recycling fee. At the same time, she stressed that this was a short-term increase. Nabiullina added that a similar spike is expected in the autumn after utility tariffs are raised. As a result, inflation by the end of the year will exceed the 4% target.
Since 2020, amid the pandemic, mortgages in Russia have been used as an anti-crisis tool: the authorities launched mass subsidized mortgages to support the public and businesses. After the start of the war, the programs remained in place, but by 2024, against the backdrop of inflation, high interest rates, and a budget deficit, the authorities concluded that mass subsidized mortgages were further fueling price growth and requiring large budget expenditures. The program was then wound down, with mainly targeted programs left in place.
However, because of expensive loans, surging housing prices — real estate prices doubled during the subsidized mortgage period — and inflation, market-rate mortgages are now beyond the reach of most Russians. The average monthly payment across Russia of 99,000 rubles makes such mortgages unaffordable for at least 47 million Russians, or 87% of those employed at medium and large enterprises. In addition, whereas loan overpayments stood at 30–50% in the 2010s and before the start of the war, they rose to 300–400% in January–September 2025.