The Central Bank of Uzbekistan has reported a 0.5% decrease in the annual interest rate of mortgage loans provided by commercial banks from centralized funds. This adjustment comes in response to the Central Bank's recent decision to lower the main rate to 13.5%, effective from July 26.
The reduction in the main rate has directly influenced the annual interest rate of mortgage loans financed through centralized funds, leading to a proportional decrease. This move is expected to make mortgage loans more affordable for borrowers across Uzbekistan.
In Uzbekistan, several commercial banks are responsible for allocating mortgage loans. These include:
- Asakabank
- National Bank of Uzbekistan
- Xalq Banki
- Aloqabank
- SQB
- Business Development Bank
- Mikrokreditbank
- Turonbank
- Agrobank
- Hamkorbank
- Orient Finance Bank
These banks play a crucial role in implementing the government's mortgage loan programs aimed at improving housing conditions for the population.
A presidential decree on additional measures to improve the mechanisms of allocating mortgage loans and improve the housing conditions of the population in 2024 has been adopted. This decree outlines several key provisions.
Firstly, the loan amounts have been specified as up to UZS 330mn ($26,193) in the Republic of Karakalpakstan and other regions, and up to UZS 420mn ($33,337) in Tashkent city. If the required mortgage loan amount exceeds these specified limits, commercial banks can finance the deficit based on market principles.
Secondly, the mandate to insure the mortgage subject against insurance risks has been canceled for loans intended for purchasing apartments in the primary housing market. This move aims to reduce the financial burden on borrowers.
Thirdly, the mortgage loan is also available to citizens without official income, making it more inclusive.
Lastly, individuals needing to improve their housing conditions can receive mortgage loans of up to UZS 120mn ($9,524) for construction, reconstruction, and repair of individual housing. Such individuals are eligible for a subsidy of UZS 30mn ($2,381)from budget funds.
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