MNT500 billion to be spent on housing mortgageSociety
an aim to reduce air and environment pollution, the Cabinet made a decision to
use money of the state budget and financial sources of commercial banks for the
mortgage loan during its regular meeting on December 5. By doing so, annual
spending on issuance of eight- percent mortgage loan, which is currently
estimated to be MNT300 billion, will be increased to MNT500 billion.
Funding for the mortgage loan
will be reflected in the state budget of the particular year and
will be distributed to commercial banks through the Bank of Mongolia under a
contract between the Ministry of Finance, Ministry of Construction and Urban
Development and the Bank of Mongolia.
The mortgage loan will be issued for flats not bigger than 80 sq.m, built in accordance with general urban development plan of provinces, the capital city and settlements and specific plan of residential and housing towns.
Besides, loans up to MNT60 million will be issued to individuals for building a private house that meets criteria including being not bigger than 120sq.m and energy efficient and having engineering facilities.
According to the regulation, a term of the loan is up to 360 months, annual interest is eight percent, advance payment is not lower than 30 percent of the flat’s total cost as well as loan-to-value ratio is not higher than 70 percent.
The borrower must be over 18 years old and legally capable, who has no outstanding loan debts or payable that must be repaid in compliance with court decisions, has not received mortgage loans before and must have a collateral.
As of September, 2017 mortgage loans worth MNT233 billion were issued to over 2700 borrowers.