The National Bank of Georgia has simplified the rules for mortgage lending in order to stimulate the real estate market.
With a mortgage loan, the down payment can be 10% of the cost of the apartment, and 90% is the loan, instead of the previous rule, according to which the consumer contributed 15% of the purchase price and received 85% of the cost of the apartment from the bank.
The change will also affect immigrants: the minimum down payment on mortgage loans issued with proof of income received abroad will be reduced from 30% to 20%.
"Amid the normalization of economic activity, in order to maintain sustainable activity in the real estate market, the National Bank temporarily increases the maximum loan-to-value (LTV) ratio for real estate secured lending
in the lari to individuals by 5 percentage points to 90%. Apart from that, The mortgage collateral ratio for persons earning income outside of Georgia will be increased by 10 percentage points, to 80%. "These changes will boost expanding access to mortgage loans," the NBG’s statement reads.
According to David Utiashvili, Head of the Financial Stability Department of the National Bank, this measure will be temporary, although it is unknown how long it will last.
