Mortgage crediting volume exceeds $0.5 BN in Azerbaijan
Azerbaijan, Baku, Feb. 5 / Trend I. Khalilova /
Loans amounting to 1.7 million Manat, or by 17.9 percent less than the funds directed for mortgage crediting were delivered through the Azerbaijan Mortgage Fund (AMF) under the Central Bank of the country in Jan. 2013, the AMF said today.
Mortgage loans worth more than 421.89 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 2013, the total amount of loan refinancing delivered by the banks earlier hit 2.68 million manat (42.86 percent less than the same period in 2012). AMF placed bonds at the amount of 8 million manat during the first month compared to 23 million manat in January last year.
Around 72% of the total volume of given loans (41% of borrowers aged 18-29, 31% - 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 35,000 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%.
Around 40 million manat were envisaged in the state budget 2013 to finance social mortgage, but the funds have not been transferred from this amount to the fund.
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 Feb. 5 is 0.7846 AZN/USD.