The National Bank of Georgia will ban 15-year mortgage loans in foreign currency and their term should be reduced to 10 years. The NBG’s changes will take effect from 2022.
"According to the decision of the Financial Stability Committee, the maximum term of foreign currency mortgage loans will be reduced from 15 to 10 years. From April 2021, in parallel with the economic recovery and the tightening of monetary policy, the growth of foreign currency mortgage loans has accelerated.
If the current trend is maintained, the annual growth rate of such loans will reach 10% in 2022. It should be noted that most borrowers are characterized with high vulnerability, which contributes to the accumulation of systemic risks in the financial sector. It also threatens the sustainability of the real estate market," - the NBG statement reads.
As of the statistics, mortgage loans of GEL 367 million were issued to individuals in Georgia in October 2021, of which 54% or 198 million GEL accounted for the mortgages in the national currency, while 170 million GEL – for mortgage loans in foreign currency.
