Mortgage Development State Programme Project goes before Government by end of May
Azerbaijan, Baku, May 23 / Trend A.Akhundov /
The Central Bank of Azerbaijan (CBA) is going to present to the government a project of the state programme for the development of mortgage lending until the end of May, 2013, chairman of the Central Bank Elman Rustamov told journalists on Thursday.
"The project is at the final stage of consideration at the CBA. I think we will present it to the government by the end of the month," Rustamov said.
As Rustamov said previously, the main objectives of the programme are bringing the mortgage scheme into line with market principles, applying an accumulative mortgage system allowing people to use their savings for mortgage loans and liberalisation of lending conditions. At the same time, Rustamov does not see the need for a separate law 'On social mortgage' which is being prepared by parliamentary committees.
The amount of commercial loans through the Azerbaijan Mortgage Fund (AMF) will be revised within the framework of the state programme. The proposal to raise the maximum amount of the regular mortgage to 100,000 manat will remain in force, the CBA has said. However, the level of initial payment is not expected to change. The proposal to expand the coverage of the social mortgage for young people also remains in force.
Currently, the maximum amount of both the conventional and social mortgage is 50,000 manat. A conventional mortgage loan can be obtained at a rate of eight per cent and a maturity of 25 years, whereas a soft loan is at the rate of four per cent for 30 years.
The initial down payment under the social mortgage is 15 per cent, while for conventional loans it is 20 per cent.
In the first quarter, the AMF provided loans amounting to 15.19 million manat, or 4.47 per cent more than the same period last year.
Currently there 27authorised banks in the Mortgage Fund and those operating in the market include 21 insurance companies and 11 appraisal organisations.
The official exchange rate for May 23 is 0.7846 AZN / USD.