How much is the mortgage down payment? Is a no-down-payment mortgage possible?
The down payment is usually 15% of the apartment's value for the state mortgage, 10% for the subsidised one and 20–30% for commercial mortgages. A mortgage with no down payment at all is practically not offered in Azerbaijan; alternatives are extra collateral (a second property), developers' in-house instalment schemes, or covering part of the down payment with a consumer loan (expensive and adds to your debt burden).
The down payment lowers the bank's and the Fund's risk and at the same time sets your monthly payment: the more you pay upfront, the smaller the loan and the interest cost. On a 100,000 AZN apartment, 15% is 15,000 AZN, plus notary, insurance and valuation costs, so the real "entry ticket" is around 18,000–20,000 AZN. Below we explain the minimums, how to save for the down payment, and what is behind "0% down" advertising.
What you need
- 1 Source of the down payment: own savings, a deposit, proceeds from a property sale (the bank may ask about the source)
- 2 Amount: 10–15% of the apartment value (state/subsidised), 20–30% (commercial)
- 3 A 3–5% reserve on top for costs (notary, insurance, valuation, fee)
- 4 A reserve to cover any gap between the valuation and the sale price
Bank offers that fit this case
| Bank | Loan | Rate | Term | |
|---|---|---|---|---|
Rabitəbank
|
Sərfəli ipoteka krediti | 8% | 300 mo. | Details |
Yelo Bank
|
Yelo - Dövlət İpotekası | 8% | 300 mo. | Details |
Unibank
|
Unibank - Dövlət İpotekası | 8% | 300 mo. | Details |
Yapı Kredi Bank
|
Güzəştli İpoteka Krediti | 4%% | 360 ayadək mo. | Details |
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Bank BTB
|
“MİDA” İpoteka kreditləri | 4%% | 360 ayadək mo. | Details |
|
Yapı Kredi Bank
|
İpoteka Krediti | 8%% | 300 ayadək mo. | Details |
ABB Bank
|
Daxili ipoteka krediti | 4% | 360 mo. | Details |
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Premium Bank
|
İpoteka Krediti | 8% | 300 mo. | Details |
Sample calculation
Estimated figures for 100 000 AZN over 240 months at ~4% effective rate. The exact number depends on the bank.
How to apply?
What to watch for?
- ✓ Raising the down payment from 15% to 25–30% saves tens of thousands of manats in interest over 25 years; pay more if you can.
- ✓ Paying the down payment with a consumer loan raises your debt burden and can get the mortgage refused; consult the bank first.
- ✓ Developers' "0% down" instalment schemes are not mortgages: the apartment is not registered in your name until fully paid; have a lawyer read the contract.
- ✓ While saving, use a deposit: interest income plus proof of funds for the bank.
Frequently asked questions
Can a relative pay the down payment?
Yes, the source of funds is not restricted. For large amounts some banks may ask for a gift agreement or proof of transfer.
Can I get a no-down-payment mortgage by pledging a second apartment?
At some commercial banks yes: existing real estate as additional collateral replaces the down payment. For the state mortgage the down payment is mandatory.
When is the down payment transferred?
Usually at the notary stage, before signing the loan contract, to the seller's account or the bank's special account, with a receipt.
Related questions
Useful links
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