About ten thousand young families are looking forward to the new mortgage conditions of the state. But most probably, they will be distressed a little. In connection with the new economic situation, an increase in mortgage interest is expected. The main changed condition will be the percentage of mortgage loans.
Currently, in the mortgage loans allocated by the state (Azerbaijan Mortgage Fund) the prepayment is 20%, the annual interest rate is 8%, the maximum amount is 50 thousand manat, the term is 25 years. To obtain this mortgage you must meet very strict requirements by proving your income with official documents.
And the second mortgage on the market is a mortgage loan issued by banks at their own expense through construction companies. This mortgage loan without prepayment or prepayment of 10-20% with an annual 8% for a period of 20 years is possible only with an identity card.
The fact is that in connection with the new economic situation, mortgage loans can rise. After the devaluation, the acceleration of inflation (a sharp rise in prices) increased the value of money. That is, banks for issuing mortgage loans, attract funds with high interest, in short, the expenditure on debts increased. Under conditions that officially inflation is 10-12%, no one will want to give money in debt with 8%. In the event of a loss of 12% per year in the ability to purchase money, the acquisition of a profit of 8% is illogical.
COST OF MONEY IS INCREASING
In a short time the Central Bank increased the discount rate (interest rate) for 2 times to 7%, and it gives grounds to say that the interest of mortgage credits will increase, that is, the Central Bank issues money to banks with 7%. And also, the discount rate of the Central Bank is the main percentage in the market, other lenders raise interest while increasing this percentage, at the same time the interest rate of savings increases. Therefore, banks purchase money with high interest, and allocate money to the population with high interest. It is expected that after the Novruz Holiday, mortgage interest rates will increase to 10-12%.
INTEREST RATES ARE BEING DISCUSSED
The Azerbaijani Finance Minister reported in January that if inflation in the country changes, then this should be taken into account in mortgage interests.
A few days ago the chairman of the Central Bank, Elman Rustamov, told journalists that the percentage of commercial mortgages is being discussed and will be established in accordance with the market. Since inflation is high and the percentage ratio has risen, market conditions have changed.
CONFIDENTIALS WOULD BE UPSET
In short, if someone thinks of buying an apartment with a mortgage, we advise him/her immediately go to the construction company and formalize the purchase and sale process. Today, many construction companies are selling apartments with 20-year mortgages. For example, you can become the owner of a premium-level apartment with a complete renovation from the "Crystal Absheron" HCC without prepayment, only with an identity card with a 20-year mortgage. The annual percentage rate is now a single digit. That is, by paying an annual 8% (effectively 4.5%) you can become the owner of a high-quality apartment. It is likely that banks with which Crystal Absheron and other construction companies work can increase mortgage interest. As noted above, banks will attract money for higher interest. Therefore, banks will be forced to increase mortgage interest, as well as other credits. Today, taking a mortgage with 8% may be an appropriate option. If in the next few days banks raise mortgage interest, confidential will be upset. At least 2-4 percent will be paid more, and this means a large amount for 20 years.
You will not get an apartment at the end if you live in tenants 20 years. And with a 20-year mortgage, you pay the rent fee for your apartment. You live in a comfortable apartment, and at the end you get an apartment. We can note that today's 20-year mortgage with 8% is very profitable considering the rent fee for tenants for 20 years, a significant increase in the apartment cost in 20 years, the decrease in the value of money due to inflation.