Commercial Mortgage Rates to be Lower Than NBA Rates’
Azerbaijan, Baku, 27 May / Trend corr. I.Khalilova / The conditions of mortgage crediting will be closed to market and the rates on commercial mortgage will be lower than the interest rate of National Bank of Azerbaijan, Fatulla Alakparov, Deputy Director of the Department on Control over loan organizations, stated.
At present, the interest rate of NBA comprises 14%. At the same time, the inflation rate comprised 16.7% as for 2007 and 17.8% as for January -April 2008.
"However, such changes will not affect the social mortgage, which will be rendered on privileged conditions at an expense of state budget on 6% or 8% per year rate," Alakparov said.
Crediting through the Azerbaijani Mortgage Fund (AIF) has been in operation at NBA, and now it will be started in the second half of year in the government sector, after the government accepts the proposals to commerce mortgage experience. The first key issue is to renew the framework of mortgage crediting. The Ministry of Finance will open financing of Azerbaijani Mortgage Fund at NBA within the framework of the limit envisaged in the budget for 2008.
The mortgage crediting has been launched on AIF standards since 25 March 2006. The demands of mortgage loan exceeded bank notes, and from the average of June AIF stopped financing the mortgage loans with its standards. AZN 46mln funds were received from the State Budget in 2005 and 2007, and will receive AZN 34mln in 2008. Some AZN10mln have already been allocated to re-financing of loans allocated by bank. The portfolio of loans on AIF standards is AZN 67.8mln.
The loan rates fluctuate from 8% to 18 or 20% in commerce banks, and term from 10 to 25years.
The official currency rate on 26 May is 0,8225 AZN/USD.
The correspondent can be contacted at: [email protected]