Tbilisi (GBC) - Foreign currency mortgages maintain double-digit growth. According to the National Bank of Georgia statistics, as of July (01.07.2025), the annual growth rate is 10.3% (L/m +8.55%Y.Y, L/Y +13.45%Y.Y).
In the last reporting month, 385 loans equivalent to 92 million GEL were issued in USD and EUR (06/2024 – 72 million, 250 loans). The share of foreign currency mortgages in issuances has increased to 23.5% (L/m – 20.5%).
Mortgages have become more expensive, both in GEL and in USD and EUR. In the national currency, last year they were issued at 11.6% in GEL, this year it is 13.1%. The annual interest rate on mortgages was set at 7.1% last year, and 8.4% this year.
According to commercial banks, the minimum effective rate for a GEL mortgage loan is 15.5%, 10% in USD, and 8.9% in EUR.
The mortgage loan portfolio, as of H1/2025, is GEL 12.5 billion, including GEL 4.1 billion denominated in foreign currency.
More than half of the portfolio is long-term loans. The short-term mortgage portfolio is GEL 10 billion. Including GEL 2.9 billion equivalent are foreign currency loans.
GEL mortgages are issued for a medium term of 10-years. From the fall of 2022, foreign currency will be reduced to 10 years (from the fall of 2022, the maximum mortgage term was reduced from 15 to 10 years).
With the summer regulation of the same year, a +3% corridor was opened for both foreign currency and lari mortgages, although foreign currency mortgages were more severely affected.
The 3% corridor provides for a +3% assessment of the borrower's solvency when issuing a variable-rate loan (most foreign currency mortgages issued are a mix of variable and fixed). This means that if the rate increases by 1, 2 or 3%, the mortgagee should not have any problems servicing the loan.