Mortgage Lending Reduced

Reduction in lending through the Azerbaijan Mortgage Fund (AMF) under the Central Bank of Azerbaijan continues. As of October 1 through agent banks was issued 77.2 million manats (minus 1.8% to January-September last year). At the same time, in September the Fund issued 5.4 million manats (the same as of October 1, 2014).

Of the total, almost half came in social mortgage (37.3 million) of the allocated 50 million AZN for the year. On average, each applicant had 40,736.7 manat, with an average term of 280 months and an average interest rate of 6.71% if paid 297 manats a month.

As the website of the AMF said, from 2006 to October 1, 2015 was issued 17,603 mortgage loans worth more than 712.8 million manats. The peak came in 2013, when banks offered 112.9 million. At the end of last year, 97.1 million was issued. So there is a tendency to reduce funds.

We recall commercial mortgage involves loan in the national currency in the amount of 50,000 manats at a rate of 8% per annum for 25 years. Social mortgage is offered by the state budget (up to 50,000 at 4% for 30 years). The main obstacle in obtaining this type of loan is the initial payment (for social mortgage - 15% for the commercial - 20%). In addition, banks require a certificate from the employer about the salary not less than 1,000 manats. This means that public sector employees with a salary of 150 to 400 manat will automatically drop out of the process, Those, who receive salaries of double-entry bookkeeping, designed to avoid the actual tax, will also not give themselves away.

The object of mortgage is only housing and the loan amount is not more than 80% of the market value of the property. Preferential mortgage applies primarily to members of families of war victims and families of national heroes of Azerbaijan. In addition, IDPs, civil servants and military personnel who have worked at least three years, candidates and doctors of sciences and honored athletes can take advantage of it.

Today, there are 30 AMF agent banks plus 21 insurance companies and 16 property appraisers. --17D-