Azernews.Az

The Azerbaijani government will determine the new terms of mortgage lending by the end of the year, Deputy chairman of board of the Central Bank of Azerbaijan (CBA) Khagani Abdullayev said.

He said that the Central Bank and the government are examining various models for changing the conditions and will finalize the package of proposals by late 2013.

The CBA has two main objectives In this process. The first is to cover the demand of the population in the social and commercial mortgages, the second - in maintaining security of the banks' mortgage portfolio.

"Until now, we had no problems with mortgage portfolio security, these risks are effectively managed," he said. "Our goal is to maintain this balance."

Mortgage loans worth 481.35 million manat were delivered in 2006-2012 through AMF (61.16 million manat in Jan.-June 2013, 74.77 million manat - in 2012, 95.64 million manat - in 2011, 97.08 million manat - in 2010, 76.9 million manat - in 2009, 70.2 million manat - in 2007, 5.6 million manat - in 2006).

Around 40 million manats were envisaged in the 2013 state budget to finance social mortgages through the AMF, which operates under the CBA. An ordinary mortgage is financed through funds obtained from placing mortgage bonds.

Currently the maximum amount of a general mortgage loan is 50,000 manats at a rate of eight percent with a payback period of 25 years. Under the social mortgage, the figure is 50,000 manats with annual rate of four percent and payback period of 30 years.

According to the terms of the AMF, the down payment under the social mortgage is 15 percent while that under the common loan is 20 percent.

In the first quarter of 2013, loans amounting to 15.19 million manats were allocated through the AMF. The figure is 4.47 percent more compared to the same period of 2012.

There are 28 authorized banks, 21 insurance companies and 11 appraisal organizations that are participants of the domestic mortgage market. Mortgage loans have been delivered to more than 11,000 families to date.