Mortgage nuances in Armenia

We will tell you what you need to know about a mortgage in Armenia, who can get it, and what interesting conditions banks offer.

Since 2022 in the country boom construction. Under the current government program, when purchasing a home, the buyer has the opportunity to return income tax in the amount of 20%. As one of the consequences, in the first 5 months of 2023, the volume of construction work in Armenia increased by 16.7% compared to the previous year. Private companies accounted for more than 60% of the work performed.

Every major developer in Armenia has partner banks. At the stage of project preparation and the start of construction, an application-contract is concluded. Each credit institution has its own conditions and programs. A mortgage loan in Armenia can be obtained not only for a new building, but also for a secondary building.

There are also 4 state programs of preferential mortgages, thanks to which housing can be purchased not only at a low interest rate, but also with its partial repayment.

The State Program for Support and Improvement of Housing Conditions in Young Families has been operating since 2008. The age of married couples does not exceed 60 years and where each of them is not more than 35 years old. But not all banks provide mortgage loans on such terms. The interest rate for this program starts from 7%.
For young families with children, the option of one-time mortgage assistance is available. Main criteria:

• There are at least 2 children under the age of 18 in the family;
• Mortgage received no earlier than July 2020;
• The cost of the apartment is no more than 30 million drams;
• The prepayment made is not less than 10%.

The state compensates 5% of the cost of the apartment, but not more than 1 million drams. If a number of conditions are met, the maximum amount of support can increase to 5 million drams. These include:

• If the borrower builds the house himself, 10% is compensated (but not more than AMD 1 million);
• At the birth of the third and subsequent children, the rate increases by 5%, respectively.

There is a function of partial repayment of the mortgage at the expense of the state. If the loan was repaid within 12 months without serious delays (maximum - 30 calendar days), the mortgage was taken not earlier than July 1, 2020, and its cost is not more than 30 million drams, then repayment of the principal amount is possible:

• If the borrower is under 25 years old, then 8% of the cost of housing in Yerevan and 15% of the cost in the regions are covered;
• If 1 or 2 children, then 5% of the cost is repaid in the capital, 10% in other regions;
• If there are more than 3 children in a family, then 25 and 50% are covered in Yerevan and regions, respectively;
• If the family has more than 3 children, and the borrower himself has less than 30, then the ratio of subsidized funds is as follows: 35% in the capital and 70% in the regions.

Since 2020, a preferential mortgage program has been operating for warrant officers and officers. During the year, 500 servicemen of the Armenian Armed Forces can use it. The main benefit is that the state compensates 10% from the cost of housing, and also subsidizes 3% from the loan rate of 7%.

Each borrower in Armenia has access to prepayment insurance. The amount of funds covered can be up to 90%. The conditions partially overlap with those that are necessary to receive financial assistance:

• There is at least 1 child under 18 in the family;
• Mortgage received no earlier than July 2020;
• The cost of the apartment is over 30 million drams;
• The prepayment made is not less than 10%.

After the 44-day war in 2020, families of internally displaced persons from Artsakh can use a mortgage loan to purchase housing in Armenia. The main conditions of this program:

• Repayment up to 8 million drams from the cost and 8% from accrued interest;
• Up to 10 million and 10% of accrued interest are covered;
• Subsidizing up to 12 million and 12% of interest.

Special program for Diaspora Armenians from Byblos Bank. The borrower must be of Armenian origin and be between the ages of 21 and 63 at the time of the loan agreement. The bank will require confirmation from the place of work (the website contains the wording “the borrower must be an employee of an international or reputable company; in the case of self-employed work, the business must be well established”). Work experience - more than 2 years.

Program conditions:

• Deposit a minimum amount of 3 monthly payments into the account;
• Initial payment - in the amount of 30%;
• The maximum payment period is 15 years (the minimum is 1 year);
• The maximum mortgage loan amount is $220,000;
• The first 3 years - the interest rate is fixed (8.75 or 9.75%); further - floating on the basis of the banking base index * margin, which varies between 9.27-14.82%.

Important: the nominal interest rate on the loan can be changed by the decision of the bank.

This section contains the most interesting and different programs from Armenian credit organizations. Eligibility criteria for similar programs (for example, mortgages for young families) may differ from each other. An example is the age of clients and their total earnings.

The application can also be submitted online. Ameriabank, in addition to the annuity and differentiated types of payments, practices a mixed one. The client has the right to draw up a payment schedule based on seasonality and his income. Bank-partner of JSC Neu-Invest Group.

The main partner bank of Armenian developers - 16 companies at once cooperate with Acba Bank. You can take a mortgage both in AMD and in foreign currency (dollars and euros). The maximum loan amount is 500 million drams.

Bank-partner of the developer "Rem Group". In terms of the maximum term for providing a mortgage loan, VTB Armenia is the leader in the Armenian market: from 10 to 30 years. The website has a handy mortgage calculator.

The main feature of the mortgage offers of this bank is the emphasis on its own customers. In addition to standard packages, ID Bank has opened the ID Home Package, which is especially beneficial for Rocket Line customers. Special offer - a separate credit line up to 5 million drams. All types of mortgages from the bank are exclusively in drams.

Offers 5 mortgage programs for the purchase of real estate. There is also a Business Mortgage program designed for the construction and purchase of commercial premises.

Bank-partner of the developer "AAA Shin" and "Omega +". There are special programs that relate to the repair of non-residential premises. Important: the bank will require AMD 5000 for consideration of the application for a mortgage loan.