The Azerbaijan Mortgage Fund (AMF) operating under the Central Bank of Azerbaijan (CBA) issued loans amounting to 80.21 million manat in January-September 2013, or 76 per cent more than the volume of financing in the same period of 2012.
Mortgage loans worth 500.44 million manat were issued since launching financing through the AMF showing the figures if 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 and 5.6 million manat - in 2006.
According to the AMF, the total amount of loan refinancing delivered by the banks earlier hit 51.95 million manat during three quarters.
The AMF placed bonds worth 37 million manat since early 2013. Funds from these bonds are spent to finance conventional mortgages.
The remaining 20 out of 40 million manat envisaged for the social mortgage in the state budget for 2013, was transferred to the AMF in July.
Around 72 per cent of the total volume of given loans, that is 39 per cent of borrowers aged 18-29 and 33 per cent - 30-35 years old, fell to young people and families. Around 28 per cent of the loans fell to borrowers older than 36.
Currently, the maximum amount of a common mortgage loan through the AMF is 50,000 manat at a rate of eight per cent with a payback period of 25 years. Terms under the social mortgage are 50,000 manat at an annual rate of four per cent with a payback period of 30 years. The initial payment under the social mortgage is 15 per cent, whilst the conventional loan is 20 per cent.
Conditions of mortgage lending are as follows. Loans must be issued in Azerbaijani manats and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house. The volume of mortgage lending must not exceed 80 per cent of the market price and the monthly payment must not exceed 70 per cent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.
Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs and those making special contributions to sport as well as to the military with at least a three-year service term. Each family having the right to such a mortgage can only use the opportunity once.
There are 28 authorized banks belonging to the Mortgage Fund. Around 21 insurance companies and 11 appraisal organizations are participants of the mortgage market.