Azerbaijan can double maximum amount of mortgage loan
Azerbaijan, Baku, Oct. 8 /Trend A.Akhundov/
The maximum size of a common mortgage loan, issued by the Azerbaijan Mortgage Fund (AMF) under the Central Bank, may be doubled, Director General of the Central Bank Rashad Orujov told Trend on Monday.
Currently 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.
Currently the adoption of new conditions of mortgage lending is being discussed. There are proposals to increase both the social and conventional mortgages. One of them is the increase of the maximum amount of a common mortgage lending to 100,000 manat, social - 50-60 thousand manat," Orujov said.
He added that the interest rates on loans will also be revised.
"These proposals are under discussion, and we believe that the decision will be taken soon," Orujov said.
The CBA CEO hopes to make progress on this issue before the end of this year.
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