Bank of Georgia to Introduce Innovative Mortgage Loan Product

JSC Bank of Georgia has developed special terms for issuing mortgage loans.

Giorgi Chiladze, a bank deputy director general, will introduce the special terms at a news conference at the hotel of Courtyard Marriott at 11 o’clock on June 17.

Bank of Georgia has already introduced several other terms for mortgage loans starting 2010.

Namely, starting April 20, 2010 Bank of Georgia consumers are able to acquire incomplete apartments thanks to a loan with a 20 percent co-participation ratio. The loan maturity period makes up approximately 10 years.

The Bank of Georgia policy is to a certain degree related to the real estate market development, the bank management says.

The product will maximally meet the consumer interests. Bank of Georgia will guarantee the consumer commitments before development companies. Both the bank loan and the consumer co-participation sum will remain on the consumer account of Bank of Georgia as long as the construction works have been completed.

Bank of Georgia charges a 4 percent annualized interest rate on the loan.

After the completion of the construction works, the loan interest rate will be the same to an ordinary GEL-denominated mortgage loan with a 14 percent annual interest rate, Gilauri said.

"Mortgage crediting risks have been reduced. We do not expect prices to further drop. On the contrary, the prices are expected to rise. The demand for apartments is rising. The market recovery has made an effect on out approaches for the real estate evaluation and we have mitigated the previous tightened terms", Gilauri said.

At this stage, the mortgage loan is accessible to clients of the development companies, which were involved in the Old Tbilisi Rehabilitation Program in 2009 and Bank of Georgia has decided to open a credit line of 25 million GEL with the mentioned companies (Arci, Olympic Star, Kalasi, Bagebi City Group), Gilauri added