Sberbank lowers mortgage interest rates
Sberbank has announced some major changes coming to their interest rates starting June 10! They've decided to lower mortgage rates by 2 to 3.5 percentage points, consumer loans by 2 percentage points, and deposits by 1 percentage point across all terms. The bank's maximum interest rate on savings products will be 19% per annum.
In line with this announcement, Sberbank anticipates another reduction in the Central Bank's key rate to 19% per annum in July. By the end of 2025, it's forecast to drop to 17%.
It's worth noting that, as of June 2025, this is the first time the Central Bank has lowered its key rate since 2022. The regulator noticed a decrease in inflationary pressure, despite continued demand exceeding supply expansion capabilities. The economy is gradually returning to a "balanced growth trajectory," according to the Central Bank.
Following the Central Bank's decision, the Moscow Exchange index climbed above 2900 points for the first time in three years, but later fell to 2830 points. Analysts described the key rate cut as a positive event for the Russian stock market, but warned that the next regulator meeting in July could be challenging.
On May 31, VTB Bank's CEO, Andrei Kostin, suggested "betting on 10 clicks" regarding the Central Bank's June decision on the key rate. Kostin believed the regulator would lower it, while VTB's first deputy chairman, Dmitry Pyanov, previously stated the bank expected the indicator to remain at 21%.
A look at how this trend unfolded in recent years: In June 2025, Russia’s Central Bank cut its key interest rate by 100 basis points (from 21% to 20%) due to easing inflationary pressure and signs of economic slowdown. Commercial banks, like Sberbank, responded by reducing deposit and lending rates to customers. The Central Bank aims to keep monetary policy tight for an extended period, with the goal of returning inflation to the 4% target by 2026. However, expectations are for the key rate to be cut further, potentially down to 15% by the end of 2025. Despite this, high real interest rates continue to impact business profits and investment, posing a risk to economic growth.
Here's a summary of key points based on the analysis:
| Date | Central Bank Key Rate | Reason for Change | Expectations ||-------------|----------------------|--------------------------|--------------------------------------|| June 2025 | 20% (from 21%) | Easing inflation, slow growth | Likely further cuts, but tight for long || (Not 2023) | — | — | — |
Finance experts predict that Sberbank's reduced interest rates in various sectors, such as mortgages and consumer loans, could signal a trend for other businesses to follow suit. By the end of 2025, the Central Bank's key interest rate could drop as low as 15%, impacting business profits and investments due to high real interest rates.
In the context of the recent changes in the finance sector, businesses may need to reassess their financial strategies to adapt to the anticipated lower interest rates, potentially leading to an investment boom.
