Mortgage lending volume in Azerbaijan exceeds $ 0.6 billion

Photo: Mortgage lending volume in Azerbaijan exceeds $ 0.6 billion 

 / Economy news

Azerbaijan, Baku, June 11 / Trend, E. Aliyev /

In January-May 2013, the Azerbaijan Mortgage Fund (AMF) under the Central Bank granted loans amounting to 42.27 million manat, or 36.7 percent more than the volume of financing in the same period of 2012, AMF said today.

Mortgage loans worth more than 435 million manat were delivered in 2006-2012 through AMF (74.77 million manat - in 2012, 95.64 million manat - in 2011, 97.08 million manat - in 2010, 76.9 million manat - in 2009, 70.2 million manat - in 2007, 5.6 million manat - in 2006).

As of January-May 2013, the total amount of loan refinancing delivered by the banks earlier hit 28.31 million manat (14.6 percent less than as of five months of 2012).

The volume of refinancing the previous loans amounted to 33.15 million manat in January-May 2012.

AMF has placed bonds at the amount of 26 million manat since early 2013.
The funds from placing the bonds are spent to finance the conventional mortgage.

No funds were allocated to finance the social mortgage in May. Some 40 million manat were envisaged for this in the state budget-2013.

Some 20 million manat of this amount were transferred to the fund.

Around 72% of the total volume of given loans (39% of borrowers aged 18-29, 33% - 30-35 years old) fell to young people and families. Around 28% of the loans fell to borrowers over 36 years old.

Currently, the maximum amount of a common mortgage loan through the AMF is 50,000 Manat at a rate of 8% with a payback period of 25 years. Terms under the social mortgage it is 50,000 Manat at an annual rate of 4% with a payback period of 30 years. The initial payment under the social mortgage is 15%, whilst the conventional loan is 20%.

Conditions of mortgage lending are as follows: loans must be issued in Azerbaijani Manats and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house. The volume of mortgage lending must not exceed 80% of the market price and the monthly payment must not exceed 70% of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.

Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs, those making special contributions to sport as well as to the military with at least a three-year service term. Each family having the right to such a mortgage can only use the opportunity once.

There are 27 authorized banks belonging to the Mortgage Fund, 21 insurance companies and 11 appraisal organizations, all are participants of the mortgage market.

The official exchange rate on June 11 is 0.7848 AZN/USD.

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