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Interest on Mortgages Reduced in Georgia

In Georgia, there is a tendency for interest rates on mortgage loans to reduce, but in spite of this, according to the World Bank, the country’s interest on a mortgage is the highest in the region, not to mention developed countries – in Georgia, the interest on the mortgage starts from 9%, while in Europe – an average figure amounts to  2-4 %.

According to President of the National Bank ofGeorgia George Kadagidze, overall interest in the Georgian banking system is quite consistent with the level of development of the country.

“The situation in Georgia in this regard is quite natural and adequate. Despite the fact that in recent years the interest for loans has reduced, they are significantly higher than in Europe. But Georgia’s economy is much weaker than in the EU. So everything is natural and there is nothing special. On the whole, I am satisfied with the current trend, as only a few years ago it was impossible to imagine asingle interest on the mortgage, and now it is a reality. In addition, the current result is not final – the interest will be reduced in the future, “- said the head of the National Bank.

According to the “Bank of Georgia”, the downward trend in interest rates began last year, and the bank has mortgage loans at 9% per year.

“As of June 2014, the portfolio of mortgage loans amounted to GEL 489.5 million, which is 25, 9% more than in the same period of 2013. In general, a portfolio of mortgage loans in this period increased by 10.9%. As of June 30, 2014,  mortgage loans in the amount of GEL 129.5 million were issued,”- say in the” Bank of Georgia”.

“TBC Bank” also  confirms a tendency to lower interest rates on loans, which issues mortgage loans at9% in foreign currency, and at 8.75% – in GEL.

The bank claims that the demand for mortgages has increased in comparison to the same period in 2013.

“VTB Bank” also confirms the growth in demand for mortgages compared with last year – in particular, according to the data for 6 months of 2014,  the portfolio of mortgage loans in “VTB Bank” has increased by 14.7%.

The minimum interest rate on loans is 9. 5%, whereas a year ago this figure amounted to  12%.