Azerbaijan issues mortgage loans worth over $18 million

Loans amounting to 14.54 million manat, or about $18.49 million were issued in the first quarter of 2012 through the Azerbaijan Mortgage Fund (AMF), acting under the Azerbaijani Central Bank, a statistical report published on the AMF website said on Thursday.

Mortgage loans worth 360 million manat have been given through the AMF between 2006 to March 2012. During January-March 2012 the total amount of refinancing the loans given by the banks hit 19.15 million manat.

The AMF has placed bonds to the sum of five million manat for the first three months of this year.

Youths and young families account for 72 per cent of the total loans (41 per cent of borrowers aged 18-29 years, 31 per cent - 30-35 years old) and 28 per cent of loans accounted for borrowers over 36 years.

The maximum amount of regular issuance of mortgages in Azerbaijan by the AMF today is 50,000 manat at the rate of eight per cent at a term of 25 years. Under the social mortgage it is 35 manat at an annual rate of four per cent and a term of 30 years. The initial payment under the social mortgage is 15 per cent, while for conventional loans it is 20 per cent.

The conditions of mortgage lending are as follows: loans must be issues in the national currency with manats and only to Azerbaijani citizens and a condition of the mortgage can only be for an apartment or private house. The volume of the mortgage lending must not exceed 80 per cent of the market price and the monthly payment for a loan must not exceed 70 per cent of a debtor's monthly income, as well as having a life insurance agreement.

Preferable conditions are granted to members of families of war victims, those who are national heroes, the homeless, civil servants with at least three years' experience, PhD candidates and PhD, persons making special contributions to sport, as well as military personnel with at least a three-year service term.

Each family having the right to a preferential mortgage loan can use this chance only once.

There are 26 authorised Mortgage Fund banks, 19 insurance companies and 13 appraised organisations all participants of the mortgage market.


/Trend/