A possible move by the state lending agency to offer less when buying mortgages financed at below 12 percent would hurt the market and banks but bring interest rates on home loans in line with the international market, analysts said Wednesday.

The Home Mortgage Lending Agency,which operates much as Fanny Mae does in the United States, buying packages of mortgages from private lenders to boost liquidity, was created to regulate the mortgage industry and provide affordable loans to homebuyers.

The agency sent two letters to regional banks noting the possible change two weeks ago, Vedomosti reported Wednesday. The move could lead to average mortgage rates rising by 1.25 percent as lenders look to curtail loans beneath the 12 percent cutoff.

"If you're selling the agency a loan given at a rate of 10.75 percent, it'll be discounted 5 percent," regional mortgage official Albina Guseva said, Vedomosti reported. "Under those conditions, the bank ... won't make anything and will need to raise its rates," she said.

The agency could not be reached for comment Wednesday.

"Obviously, this would hurt the market in general, and it superficially hurts lenders as well as the general population," said Vladimir Pantyushin, an analyst Jones Lang LaSalle.

"Banks will either have to sacrifice liquidity because they don't want to sell their loans to the HMLA or turn a loss but get liquidity back," Pantyushin said, adding that the effect shouldn't be "over emphasized," as most housing purchases in Russia are made without mortgages.

"The increasing number is in line with the overall increase in the mortgage market and the expectation that prices in the housing market will not be declining," said Olga Naidyonova, a banking analyst at Alfa Bank.