Don’t put off life’s important decisions. Make your dream of owning a home a reality with Acba’s construction loan on favorable terms.
Land plot intended for construction,
and, where necessary, other collateral and/or a guarantor
Term:
Minimum term - 12 months
Maximum term - 240 months
Annual interest rate (fixed for a term of up to 60 months):
Currency* | Nominal interest | Nominal interest |
AMD | 13.75-14.5% | 15.35 – 17.67% |
Annual interest rate (floating):
Fixed-rate period | Currency* | Nominal interest | Annual percentage rate |
3 years | AMD | 13-13.5% | 13.72 – 16.28% |
5 years | AMD | 13.5-13.9% | 14.31 - 16.74% |
ATTENTION: The nominal interest rate on floating-rate mortgage loans may be changed by the financial institution no more than twice a year.
The maximum limit of the nominal interest rate on a floating-rate mortgage loan is set at +/- 4 percentage points from the approved interest rate.
Loan repayments - equal monthly payments or equal installments of the loan principal, with monthly payments covering interest and partial repayment of the loan.
If necessary, a different repayment schedule for interest and loan principal may be established.
Collateral - if necessary, other real estate, movable property, funds, guarantees, etc. may also serve as collateral.
Commission fee - 0.5% of the loan amount, or it may be set at 0%, in which case 0.5% will be added to the nominal interest rate and, in the case of a floating interest rate, also to the fixed component.
Interest calculation - daily, based on the outstanding loan balance.
Loan-to-value ratio - up to 100%.
Learn more:
Variable component of the floating interest rate on mortgage loans
Amount of possible additional fees - Loan Rates
How to receive an income tax refund for interest paid on a mortgage loan for real estate purchase
This information is for guidance purposes only.
In accordance with the Tax Code of the Republic of Armenia, we will help you receive a refund from your income tax for interest paid on your mortgage loan.
Income tax paid by individuals who are employees is refunded in the amount of interest paid for servicing a mortgage loan if:
The mortgage loan was provided for the construction of an individual residential house within the territory of the Republic of Armenia and was actually used for the stated purpose.
What restrictions apply to receiving the refund?
The total amount of income tax subject to refund may not exceed AMD 750,000 for each quarter.
What is required to receive the refund?
Submit the following documents to the territorial division of the tax authority at the location of the individual residential house under construction:
The loan package (originals or notarized copies of the sale and purchase and mortgage loan agreements, agreements for property/properties serving as additional collateral, if any, the master loan agreement and loan agreements attached to the master loan agreement, as well as the state registration certificate of the right to purchase real estate in the building under construction within the framework of the mortgage agreement)
Construction permit for the individual residential house issued to the person considered the borrower (valid within the time limits established by the legislation of the Republic of Armenia)
Identification document of the borrower/co-borrower
Social Services Number or a certificate confirming the absence of a Social Services Number
For the purpose of receiving a refund of interest paid during each quarter, submit an electronic application through the official website of the State Revenue Committee of the Republic of Armenia, also indicating the bank account number of the individual receiving the refund.
ATTENTION: The application may be rejected if, at the time of submission, the tax liabilities declared in the monthly (simplified) income tax and social payment calculations for salaries and equivalent payments for the months of the reporting quarter have not been fully paid.
During the term of the loan (provided that the loan has already been active with the Bank for 6 months), the customer may visit a branch and apply for a loan payment holiday.
A loan payment holiday is offered in the following cases:
The customer (borrower/co-borrower) is on maternity leave, or
The customer (borrower/co-borrower) is on childcare leave
Only once during the loan term
For a period of up to 6 months
During the payment holiday, only accrued interest is repaid
The customer may use the Loan Payment Holiday if payments under the respective loan have been made properly.
Applicant’s identification document
Social Services Number or a certificate confirming that no Social Services Number has been issued (where necessary)
Certificate of ownership of the real estate or land plot under construction/to be pledged (copy)
Identification documents of the co-owners of the real estate under construction/to be pledged (copies) and copies of their marriage certificates (if married)
Certificate from the applicant’s employer specifying the applicant’s average monthly income (calculated based on the last 12 months)
Document(s) confirming ownership of the property offered as collateral (copy)
Estimate of construction works and material costs
Construction permit
Documents must have been issued no more than 15 days prior to the date of submission.
Depending on the circumstances, additional documents and information may be required.
*The certificate must specify the customer’s net monthly salary/income after taxes, the employer’s address and telephone number(s), the signature and seal of the head of the issuing organization, the reference number, and the month and date of issue.
A decision on the loan application will be made and the customer will be notified by phone and/or electronic means of communication within a maximum of 6 banking days after submitting the required documents.
If a positive lending decision is made, the loan will be processed within a maximum of 2 banking days after completion of the collateral registration process.
Example of loan interest calculation:
Loan amount - AMD 20,000,000
Loan interest rate - 13.5% (floating)
Loan term - 240 months
Commission fee* - 0.5%
In this example, the monthly loan payment will be AMD 241,475.
The annual percentage rate (APR) will be 14.74%.
The daily interest amount will be calculated as follows:
Loan amount (outstanding balance) × Loan interest rate ÷ 365 = (20,000,000 × 13.5% ÷ 365) = AMD 7,394.26
*The annual percentage rate (APR) has been calculated including the real estate appraisal service fee, notary service fee, real estate collateral right registration certificate fee, and unified certificate fee.
*The repayment amount may vary depending on the number of days in the respective month.
*In the event of early (unscheduled) repayment of the loan amount or a portion thereof, the Bank reduces the borrower’s cost of credit.
ATTENTION: LOAN INTEREST IS CALCULATED BASED ON THE NOMINAL INTEREST RATE, WHILE THE ANNUAL PERCENTAGE RATE (APR) SHOWS HOW MUCH THE LOAN WILL COST YOU IF INTEREST AND ALL MANDATORY PAYMENTS RELATED TO THE ISSUANCE AND SERVICING OF THE LOAN ARE MADE IN THE AMOUNTS AND WITHIN THE TIME FRAMES SPECIFIED. YOU CAN FIND THE APR CALCULATION HERE.
Learn more:
If the borrower fails to fulfill their obligations on time, a penalty of 0.13% is charged for each day overdue (applicable penalties).
Loan repayments are applied in the following order (when settling overdue obligations):
For scheduled repayments
Penalty/fine
Interest
Principal
For early repayment of principal (when settling an overdue obligation)
Full repayment of the overdue obligation
Principal repayment
For early repayment of principal (for the amount exceeding the overdue obligation)
Principal repayment
Qualified independent appraisal companies cooperating with the Bank
Mortgage loans for real estate construction are provided to resident individuals aged 18 or older who will not reach retirement age + 4 years during the entire term of the loan.
Mortgage loans for real estate construction are provided for the purpose of constructing residential real estate.
The loan amount is disbursed by non-cash transfer.
Factors contributing to a positive lending decision include an assessment of the customer’s creditworthiness.
Factors that may result in the rejection of a loan application include insufficient financial indicators identified during the assessment, the customer’s poor credit history, insufficient or unavailable required collateral, the professional opinion of the Business Advisor, and the professional opinion of the Credit Committee.
The loan is processed at the Bank’s branches.
The pledged real estate is appraised by a qualified independent appraisal company cooperating with the Bank.
Agreements on the pledge of property serving as collateral for the mortgage loan are notarized, and the pledge rights arising from such agreements are subject to state registration.
The Bank is obliged to provide the customer with the proposed agreement 7 days in advance and allow a 7-day consideration period.
During the term of the agreement, statements are provided 20 business days before each repayment specified in the schedule, using the customer’s preferred method of communication.
During the term of the agreement, loan account statements and other information that must be provided under the legislation of the Republic of Armenia are provided free of charge. Statements that are not required to be provided under the legislation of the Republic of Armenia, as well as duplicate statements, are provided as follows:
Up to 6 months old (inclusive) - free of charge
From 6 to 12 months old (inclusive) - AMD 2,000 (including VAT)
More than 1 year old - AMD 3,000 (including VAT)
If required, information about the loan may be provided in the form of a certificate for AMD 5,000 if requested on the same business day the application is submitted, or for AMD 3,000 if provided on the business day following submission of the application.
The pledged real estate is appraised by a qualified independent appraisal company cooperating with the Bank.
YOU HAVE THE RIGHT TO COMMUNICATE WITH THE FINANCIAL INSTITUTION USING YOUR PREFERRED METHOD - BY POST OR ELECTRONICALLY. RECEIVING INFORMATION ELECTRONICALLY IS THE MOST CONVENIENT OPTION. IT IS AVAILABLE 24/7, ELIMINATES THE RISK OF LOSING PAPER DOCUMENTS, AND ENSURES CONFIDENTIALITY.
The Bank may unilaterally change the interest rate specified in the agreement by notifying the Borrower at least 7 calendar days in advance if the loan is not used for its intended purpose or if the obligations stipulated in the loan agreement are not fulfilled.
ATTENTION: WHEN YOU APPLY FOR A LOAN, THE BANK WILL PROVIDE YOU AND THE GUARANTOR(S) (IF ANY) WITH AN INDIVIDUAL INFORMATION SHEET ON THE ESSENTIAL TERMS OF THE MORTGAGE LOAN, WHICH WILL SET OUT THE INDIVIDUAL TERMS OF THE LOAN TO BE PROVIDED TO YOU.
The customer may incur the following costs in connection with the loan:
Real estate appraisal service fee - AMD 5,000 and more, depending on the area and type of property
Notary service fee - AMD 3,000-15,000
Real estate collateral right registration certificate fee - AMD 2,000-25,000
Unified certificate fee (regarding restrictions on real estate) - AMD 10,000
Fees related to pledging other property - AMD 2,000-10,000
All fees are included in the calculation of the annual percentage rate (APR).
Loans issued at either a fixed or floating interest rate may be repaid in full or in part before the contractual maturity date. In this case, the customer pays the interest calculated for the actual period of the loan, as well as a one-time penalty in the following amounts:
For early repayment during the first year - 0.6% of the amount paid in excess of the loan principal due for repayment during the respective contractual year
For early repayment during the second year - 0.4% of the amount paid in excess of the loan principal due for repayment during the respective contractual year
For early repayment during the third year - 0.2% of the amount paid in excess of the loan principal due for repayment during the respective contractual year. No penalty is charged for early repayment during the remaining term of the agreement.
For this purpose, each 12-month period following the date of conclusion of the agreement is considered a contractual year.
FORECLOSURE ON COLLATERAL
THE PLEDGED PROPERTY MAY BE FORECLOSED UPON IF THE BORROWER FAILS TO MAKE INTEREST AND LOAN PRINCIPAL PAYMENTS ON TIME. IF THE VALUE OF THE COLLATERAL IS INSUFFICIENT, THE BORROWER’S OBLIGATIONS WILL BE SETTLED FROM THE BORROWER’S OTHER PROPERTY.
Information provided to the Credit Register
IF THE BORROWER FAILS TO MAKE INTEREST AND LOAN PRINCIPAL PAYMENTS ON TIME, INFORMATION ABOUT THE BORROWER WILL BE RECORDED IN THE CREDIT REGISTER.
A POOR CREDIT HISTORY MAY PREVENT YOU FROM OBTAINING OTHER LOANS IN THE FUTURE.
FOR GUARANTORS
Please be informed that:
If the borrower fails to fulfill their obligations, you will be required to pay on their behalf, your credit history will be negatively affected, and you may lose your property.
You will be provided with copies of the loan agreement, guarantee agreement, and repayment schedule.
Communication will be carried out using the method selected by you.
You will be notified of changes to the terms of the agreement 7 business days in advance.
You will receive a reminder about an outstanding obligation 3 business days in advance.
If a loan repayment is overdue, you will be notified no later than one day after the delay occurs.
THE GUARANTOR HAS THE RIGHT TO
Request information from the lender about the outstanding loan balance at any time.
Recover from the borrower the amounts you have paid toward the loan, as well as any other losses incurred on behalf of the borrower.
You can learn more about the importance of credit history and the use of credit scoring here.
Financial Assistant
ATTENTION: "YOUR FINANCIAL INFORMANT" IS AN ELECTRONIC SYSTEM THAT MAKES IT EASY TO SEARCH FOR, COMPARE, AND CHOOSE THE MOST EFFECTIVE OPTION FOR INDIVIDUALS.
