Baku, Azerbaijan, Oct. 11
By Eldar Janashvili – Trend:
The average annual interest rate on mortgage loans issued from January to September 2019, is 7.1 percent, the Azerbaijan Mortgage and Credit Guarantee Fund told Trend.
Despite the maximum interest rate on conventional mortgage loans is eight percent, as a result of healthy competition in the field of mortgage lending recently, the authorized banks offer mortgage loans with lower interest rates to the population.
Thus, the average annual interest rate on mortgage loans issued from January to September 2019 decreased by an additional 0.2 percentage points compared to the same indicator over the last three years.
In general, the interest rate on mortgage loans in Azerbaijan is lower than in several neighboring countries. So, interest rates on mortgage loans range from nine to ten percent in Russia, from 12 to 14 percent in Kazakhstan, and reach 12 percent in Turkey, the fund said.
The preferential loans on social mortgage are issued at four percent per annum through the funds allocated from the state budget, and ordinary mortgage loans are issued at eight percent per annum through the funds raised by the fund from the domestic financial market.
A low interest rate on mortgage loans is set and accessibility for the population is preserved thanks to the state support in this sphere.
According to the fund, measures are regularly taken together with other relevant state agencies to expand the access of the country's population with an insufficient level of down payment to mortgage loans, improve the mortgage lending system, increase the maximum amount of loans on both ordinary and social mortgage loans, introduce a mechanism for guaranteeing mortgage loans, and to create a restructuring mechanism to protect the rights of borrowers.
The introduction of automation in the field of mortgage lending has created the conditions for improving the level of public services, obtaining the necessary documents for issuing mortgage loans in e-format and accelerating the process of issuing loans.
The fund constantly identifies the problems of mortgage lending and the needs of the population. The experience of the leading countries is learnt and used, and, if necessary, appropriate measures are taken to improve the mortgage lending system.