Bank clerks and insurers most often take out home mortgage in Azerbaijan

Baku, Azerbaijan, Oct. 31

By Anvar Mammadov – Trend:

Home mortgage is most often taken out by bank clerks and insurers in Azerbaijan, the Azerbaijan Mortgage Fund (AMF) said in a report Oct. 31.

According to the report, 21.5 percent of all mortgage loans received in the country at the end of the third quarter of 2017 accounted for bank clerks and insurers, 21.2 percent - servicemen, while 12.6 percent - power engineering specialists.

A much smaller share of mortgage loans accounts for other categories.

Around 9 percent of mortgage loans accounted for law enforcement officers, 4.5 percent - civil servants, 3.4 percent – people working in communications sector, 2.5 percent - people working in education sector and 2 percent - people working in construction sector.

The table below shows the number of people working in various spheres who took out mortgage loans at the end of the third quarter of 2017:

Since 2006 up till now, 20,417 mortgage loans worth 882.39 million manat have been issued by the AMF’s authorized credit organizations.

According to the new mortgage loan issuance order, approved in June 2016, an ordinary mortgage loan will be issued only to Azerbaijani citizens and only in the national currency for a term from 3 years to 25 years, while preferential mortgage - up to 30 years to purchase a house, owned by the citizen. Interest rates on conventional mortgage must not exceed eight percent, while 4 percent per annum in preferential mortgage loan.

The maximum amount of the mortgage loan (including preferential) is determined by Azerbaijan Mortgage Fund JSC and must not exceed the cost of repaired housing with an average of 100 square meters in zone #7 in Baku. Annual interest rates on the loan are determined by the company’s Supervisory Board.

The amount of preferential mortgage loan must not exceed 85 percent of the cost of purchased housing by the date of the loan issuance, except for cases when a borrower appeals to decrease the loan amount. The amount of conventional mortgage loan must not be less than 75 percent and more than 85 percent of the cost of purchased housing by the moment of the loan issuance, except for the cases when a borrower appeals to decrease the loan amount.

The monthly payment for a mortgage loan must not exceed 70 percent of a debtor's monthly income. The age of the borrower must not exceed the retirement age according to the legislation. An agreement on life insurance is required.

The family members of war victims, national heroes, internally displaced people, civil servants with at least a three years' experience, teachers of secondary schools with at least a five-year service term, PhDs, doctors of science and those having special merits in sport as well as the military with at least a three-year service term can use the preferential conditions. Each family having the right to such a mortgage loan can use it only once.

Around 24 out of 31 banks in the country, as well as 17 insurance companies [in total 22] and 13 appraisal organizations are the authorized banks of the Azerbaijan Mortgage Fund.

(1.7002 AZN = $1 on Oct. 31)