AZE.US
Mortgage lending remains one of the primary pathways to homeownership in Azerbaijan, but a growing number of borrowers are transferring their mortgage rights to third parties as financial pressures intensify.
Housing prices have continued to climb, while mortgage loans are typically issued at interest rates ranging from 4% to 8%. In some cases, annual property price increases of 15–20% have allowed borrowers who can no longer meet monthly payments to resell their mortgaged apartments at current market value, limiting potential losses.
Financial experts say that when a borrower faces payment difficulties, transferring mortgage rights to another eligible buyer can be a viable solution. The new buyer must meet the bank’s credit criteria, and the transaction requires formal approval from the lending institution.
Market participants note that purchasing a property under mortgage does not necessarily carry additional risk, provided all documentation is properly structured and the bank is directly involved in the transfer process. Complications may arise if transactions are handled outside formal banking channels or through intermediaries.
If a borrower returns the property to the bank due to insolvency, previously paid installments are generally not refundable. Mortgage contracts typically allocate earlier payments toward interest and contractual obligations, meaning borrowers cannot reclaim those funds once the agreement is terminated.
Insurance also plays a critical role in mortgage agreements. Property insurance is mandatory, and life insurance is often required or strongly recommended. In the event of the borrower’s death, a valid life insurance policy can cover the outstanding loan balance, protecting heirs from inheriting debt obligations.
Financial advisers stress that taking on a mortgage is one of the most significant long-term financial decisions households make. Careful assessment of repayment capacity and potential economic risks is essential, particularly in a market characterized by rising property values and evolving lending conditions.