Percentage point: developers massively refuse installment payments for housing
The share of installments in the primary Russian market has decreased by almost 2.5 times since the beginning of the year, market participants told Izvestia. In addition, developers are significantly tightening the terms of such loans or even reducing the scope of the program. Experts attribute this to the abolition of fees for issuing preferential loans, which made mortgages more profitable for sellers, as well as the weakening of monetary policy in Russia. For more information about the installment market, see the Izvestia article.
Why is the installment plan refused?
The share of installments for the purchase of apartments in new buildings has decreased 2.2 times since the beginning of the year, developers and realtors told Izvestia. In January 2025, the share of installments in the primary market peaked at 29.9%. In February, it decreased to 20%, in March — to 17%, in April — to 14%, and in May — to 13.6%.
The features of the installment plan are the opportunity to purchase real estate without resorting to a mortgage, but at the same time not immediately paying the entire amount, Ilya Frolov, managing partner of the development company Stenoy, recalled. If the installment plan is interest-free, then the buyer also does not overpay the initial cost of the apartment. At the same time, a person can fix the cost, as well as choose an individual payment schedule, added Georgy Labintsev, CEO of the Delo development company, confirming the reduction in the number of installments.
— The amount of the payment may vary depending on the installment period, which is usually from one to three years, and the initial payment, — said the expert. — Moreover, if the client makes an initial payment of 30% and at the end of the installment period the same amount, then the monthly payment will be minimal.
Irina Soboleva, Commercial Director of Baltschug Development, noted that this is especially convenient for buyers who, for example, have already sold or are planning to sell other real estate, or have temporarily placed funds on deposit.
— The dynamics of installments in the market is heterogeneous: there is indeed a decrease in certain segments, especially compared to peak rates. This is largely due to the tightening of the regulator's positions and increased attention to the risks that have accumulated in the system," she said.
According to the results of the first quarter of 2025, the share of installments, for example, in Moscow decreased to 40%, confirmed Ekaterina Nalivaiko, marketing director at Plus Development.
—Although even at the end of March, when the recession became apparent, many still predicted rapid growth in installments," she pointed out. — It didn't happen in the end — the family mortgage became more affordable, and then the bank fees were canceled. Currently, the installment rate hardly exceeds 25-30%. Mortgage easily regained its absolute leadership.
Experts attribute the decrease in the share of installments, among other things, to the abolition of fees for issuing preferential loans by the largest banks, that is, mortgages have become more profitable for developers.
"Preferential mortgage programs have received a new wave of government support," said Rustam Azizov, Director of Mortgage Sales and Implementation of Financial Instruments at A101 Group. — The expansion of family mortgages and the creation of a program for CBOs participants and their families seem very promising to the market.
Why developers are phasing out installments
Developers themselves began to limit the use of installments in sales due to the risks that the period of unavailable mortgages would last a long time, added Tatiana Reshetnikova, deputy head of the mortgage department at the federal company Floors.
— In a family mortgage, conditions may change or approval may decrease, as a result, installment agreements will either have to be terminated and the funds returned to the shareholders, or they will have to look for options for their prolongation after the house is put into operation, — said the expert. — Both scenarios create additional risks for developers' financial models.
Summarizing the results of their programs, developers have begun to actively adjust them, confirmed Valery Tumin, Director of Russian and CIS Markets at fam Properties. For example, to reduce the attractiveness of such products to customers: the installment period is reduced, the initial payment is increased, and other conditions are tightened.
"This is done to reduce the share of installments in the portfolio of developers and to increase the occupancy of escrow accounts," he explained. — Meanwhile, installments in the current key situation remain almost the only opportunity to buy an apartment for many categories of Russians. And it will be like this for a long time, since the policy of monetary easing is unlikely to be drastic.
From the developer's point of view, installments are a temporary measure that is not always economically justified. It helps to replenish escrow accounts in the short term, but carries increased risks, said Evgeny Tkachev, a real estate expert and head of the federal Family Capital program.
— Therefore, large players who know how to count money prefer to use a tranche mortgage. It's more stable and manageable," he said. — Now installments are mainly used by developers with a high proportion of their own funds and a small leverage. The growing popularity of installments in the past has been associated with active promotion by realtors and developers. The idea was sold to people: take an installment plan, and then, when the rate drops, just refinance.
Now, according to the expert, there is a reverse trend: some buyers are reviewing their financial capabilities, assessing risks and withdrawing from transactions. Many purchase decisions were made emotionally, at the trigger level — not always carefully.
— And in some cases, people simply did not approve the mortgage, which they expected to switch to after the end of the installment plan, — said Evgeny Tkachev. — Therefore, I believe that the share of terminations under installment agreements will grow in the near future, and the number of installments in the total volume of transactions will decrease.
The problem is that many buyers do not fully understand the risks associated with this mechanism and do not always adequately assess their debt burden.
— When the realization comes, they ask themselves a logical question: "Why do I need this apartment at all?" And they terminate the contract," he added.
What are the risks of the installment plan mechanism?
The main risk for a person making an installment plan is a violation of payment deadlines, Irina Soboleva said. Theoretically, this can lead to the termination of the contract or the imposition of fines. In addition, in case of non-payment, the client will be forced to either switch to a mortgage with an unfavorable rate, or terminate the equity agreement, added Anatoly Batalin, Commercial Director of Sadovoye Koltso Group.
"This is also a big risk for the developer, since in case of termination of the installment plan, the developer must return most of the funds paid by the buyer," he said. — That is, if the installment plan is valid until the house is put into operation, the developer may face the fact that he will receive a large number of cancellations and will have to put the terminated apartments on sale again.
Given the first reduction in the key rate in almost three years from 21% to 20% per annum, there may be a tendency for the share of mortgage purchases to increase, especially if the Central Bank continues to lower the "key" and the terms of the software become favorable, says Valery Ruchi, head of the sales department of the development company UNIQ Development.
"Many buyers who entered into installment transactions expected that in the future the Bank of Russia would lower the key rate, respectively, mortgage rates would also drop, and they would be able to switch to this payment mechanism with a more comfortable schedule and amount of payments," the expert added.
Since the beginning of 2025, according to him, the terms of the installment plan have changed, the amount of the initial payment has increased from 10-15% to 30-40% of the lot value in order to ensure that developers have access to escrow accounts.
If the key interest rate returns to more comfortable levels, and with it mortgage products with clear terms and rates, demand will naturally shift towards classic mortgages, agreed Maxim Samsonov, CEO of Tashir Estate.
"If the key rate returns to more comfortable levels, then installments will remain a niche tool," he noted. — It can be used as a point-to-point way to stimulate sales, for example, for individual lots or as part of project launches, but its role will no longer be as significant as during a period of high percentage load.
For clients with high purchasing power, as well as investors, installments are beneficial as an opportunity not to immediately invest all funds in a project under construction.
If the Central Bank's rate starts to decrease, the installment mechanism is likely to come to naught — it was an emergency measure to adapt to the prevailing conditions, believes Evgeny Tkachev. At the same time, new categories of buyers will now enter the market who can take advantage of preferential mortgage programs from developers: these are members of their families, teachers, doctors, as well as buyers subject to extended family mortgage conditions.
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