Mortgage lending through state line decreases in Azerbaijan

Business Materials 5 February 2015 19:10 (UTC +04:00)

Baku, Azerbaijan, Feb.5

By Maksim Tsurkov - Trend:

The Azerbaijan Mortgage Fund (AMF) under the Azerbaijani Central Bank delivered loans amounting to 97.1 million AZN in 2014 or 14 percent less than in the same period of 2013, the Central Bank of Azerbaijan's report on the results of 2014 said Feb.5.

Mortgage loans worth more than 636 million AZN have been delivered since launching financing through the AMF, including 112.9 million AZN in 2013, 74.77 million AZN - in 2012, 95.64 million AZN - in 2011, 97.08 million AZN - in 2010, 76.9 million AZN - in 2009, 70.2 million AZN - in 2007 and 5.6 million AZN - in 2006.

The official exchange rate is 0.7844 AZN/USD on Feb. 5.

The total amount of refinancing the loans delivered by the banks earlier, hit 126.4 million AZN in 2014, according to the report.

The average amount issued by AMF authorized banks is 40,206 AZN (this figure amounted to 39.474 AZN in 2013), the average term of loan issue - 279 months (278 months), the average interest rate is 6.79 percent (versus 6.88 percent in 2013), and the average monthly payment is 332.5 AZN (319.9 AZN).

Currently, the maximum amount of a common mortgage loan through the AMF is 50,000 AZN at a rate of 8 percent with a payback period of 25 years. Terms under the social mortgage are 50,000 AZN at an annual rate of 4 percent with a payback period of 30 years. The initial payment under a social mortgage is 15 percent, whilst a conventional loan is 20 percent.

Conditions of mortgage lending are as follows: Loans must be issued in Azerbaijani AZN 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 percent of the market price and the monthly payment must not exceed 70 percent of the debtor's monthly income. It is compulsory to have 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 and 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.

At present, the authorized banks of the Mortgage Fund are 28 banks [some 44 banks operate in the country].

Some 21 insurance companies [their total number is 27] and 14 appraisal organizations are the participants of the mortgage market.


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