Initial mortgage payments to be guaranteed in Azerbaijan
Azerbaijan, Baku, Oct. 9 /Trend A.Akhundov/
The insurance fund will guarantee mortgage downpayments in Azerbaijan, Central Bank General Director Rashad Orujov told Trend.
"A special fund is created to provide guarantees for initial payment on mortgages. So, young family, which can not accumulate the down payment, get a guarantee of a special fund, and thus has an opportunity to buy an apartment without a down payment. This mechanism is being discussed," Orujov said.
He noted that, the fund is likely to be established in Azerbaijan Mortgage Fund (AMF).
"It can be created under the AMF, but there are different options for its institutional placement" Orujov said.
He added that means from the state fund can be directed to finance the fund.
"Budget means can be used for fund's financing, so that it has enough resources to insure appropriate guarantees," he said.
At the same time Orujov doesn't specify the term of the fund's creation.
"We hope that the creation will be completed quickly," he said.
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.
There are 27 authorised banks belonging to the Mortgage Fund, 20 insurance companies and 13 appraisal organisations all as participants in the mortgage market.
The official exchange rate on Oct 9 is 0.7851 AZN/USD.