Azerbaijan, Baku, Oct. 8 /Trend A.Akhundov/
Rates of mortgage lending in Azerbaijan will be restored in the near future, General Director of the Central Bank Rashad Orujov told Trend on Monday.
"The funds allocated from the state budget to the Azerbaijan Mortgage Fund (AMF) to finance social mortgage will be significantly increased in 2013. In this regard, we are negotiating with the government," Orujov said.
He noted that 40 million manat will be provided in the state budget for this purpose next year compared to 20 million in 2012.
"In addition, the fund itself draws money from the market and financed mortgage loans through banks. Now fund accumulates new tools. We believe that the rate of mortgage loans will be restored in the near future. All depends on what funds will be allocated for it" Orujov said.
The Azerbaijan Mortgage Fund (AMF), acting under the Central Bank, granted loans worth 45.58 million manat in January - September 2012 compared to 68.8 million manat during the same period last year.
Mortgage loans totaling 391 million manat have been granted from 2006 to Oct, 2012.
The maximum amount of a common mortgage loan through the AMF is 50,000 manat at the rate of eight per cent and a payback period of 25 years and under the social mortgage it is 35,000 manat at an annual rate of four per cent and a payback period of 30 years. The initial payment under the social mortgage is 15 per cent, while for conventional loan is 20 per cent.
Conditions of mortgage lending are as the following: loans must be issued in the national currency in manats and only to Azerbaijani citizens and the subject of the mortgage can only be an apartment or private house. The volume of the mortgage lending must not exceed 80 per cent of the market price and the monthly payment for a loan must not exceed 70 per cent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.
Preferable conditions are granted to members of families of war victims national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs, persons making special contributions to sport, as well as the military with at least a three-year service term. Each family having the right to such a mortgage loan can only use the chance once.
There are 27 authorised banks belonging to the Mortgage Fund, 20 insurance companies and 13 appraisal organisations all as participants in the mortgage market.
Official exchange rate on Oct 8 is 0.7851 AZN/USD