Russian mortgage market booming

Another lender on the Russian mortgage market, Raiffeisen Bank, also says that customers prefer fixed-rate mortgages, because they provide a clear plan of their future outlay. Whether their rates are fixed or variable, anyone taking out a new mortgage in Russia next year is likely to be feeling the pinch as the cost of borrowing for banks rises and is passed on to customers. In 2007 the banks started raising mortgage rates, which may be leading to a small but noticeable increase in defaults.

But the banks say tight lending criteria mean that most Russian mortgage customers are a safe bet, and it s likely to stay that way in the short term.