Baku, Azerbaijan, June 25
By Zulfiyya Gurbanova - Trend:
Housing and Savings Bank, the creation of which is planned in Azerbaijan will be a completely new institution, Azerbaijani Central Bank Director General Rashad Orujov told Trend.
The creation of the bank included in the CBA strategy for the development of mortgage loans is presented to the government for consideration, he said.
"Creation of housing savings bank after the German model is one of the important areas of the strategy. The process of creating the bank may begin only after the adoption of the strategy. Therefore, to speak about any term or other details is early yet," Orujov said.
The creation of such bank and promotion of low-cost housing will be implemented in an integrated way, according to the general director.
"Therefore, this document is called a strategy of mortgage loaning. As we noted earlier, Azerbaijan Mortgage Fund (AMF) is not the only solution of the housing finance problem. It is necessary to develop a complex approach and use the experience of other countries," Orujov said.
The essence of housing savings bank is that the citizens will be able to receive mortgage loans, putting money in the bank. However, the volume of loan will significantly exceed the amount of the deposit.
Today there are various options in the world and the share of savings for getting a mortgage loan can make up both 50 percent and 30 percent.
At present, the Azerbaijani Mortgage Fund under the Central Bank provides mortgage lending in the country for social mortgage through 28 authorized banks at the expense of the state budget and through the placement of mortgage bonds - financing of conventional mortgages.
The maximum size of a conventional mortgage through the AMF is 50,000 AZN at a rate of 8 percent and a maturity of 25 years. The size of a social mortgage is 50,000 AZN at an annual rate of 4 percent and the term of 30 years. The initial payment under the social mortgage is 15 percent, while for a conventional loans - 20 percent.
Mortgage terms are as follows: loans must be issued in national currency, manat, and only to the citizens of Azerbaijan, the subject of the mortgage can only be an apartment or private house, the amount of the mortgage should not exceed 80 percent of the market value of the property, the monthly payment for a loan must not exceed 70 percent of monthly income of the borrower, the presence of an agreement on life insurance and other conditions.
Preferable conditions are granted to members of families of war victims, families of National Heroes of Azerbaijan, internally displaced persons, civil servants with at least a three years' experience, candidates and doctors of science, 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 use the opportunity only once.
At present, there are 21 insurance companies and 11 appraisal organizations in the mortgage market.
The official exchange rate on June 25 is 0.7843 AZN / USD.
Edited by CN