Mortgages In Georgia For Foreigners

Georgia has always attracted tourists with its rich culture. It is also interesting for investment opportunities or for permanent relocation. Because we receive a lot of questions about mortgage possibilities for foreigners in Georgia, we decided to answer your questions in our blog post. Real estate expert Helen Sterling answers some of the frequently asked questions. (Russian version here)

Can non-resident foreigners get a mortgage in Georgia?

Yes. Georgian banks will issue mortgages for owners. Developers often have mortgage programs available as well. Theoretically, conditions for issuing mortgage for residents and non-residents are the same, but there are specific differences that should be taken in consideration, such as your source of income. 

How much can I borrow, and how much do I need for a down payment?

Typically, Georgian banks will give a loan of up to 70% of the value of the property for a period not exceeding ten years. Compared to first world countries, interest rates in Georgia are high. For example, TBC Bank offers interest rates of 5.6% on loans denominated in euros, 7.8% on loans denominated in US dollars or 13.9% on loans denominated in Georgian lari (information as of July 2022). 

What is required in order to get a mortgage?

First, you must have a stable income. Income can be of different types: wages, salary, rentals, business income or regular and reliable transfers from abroad. If income varies from month to month, the bank will calculate the average. More than one income may be accepted for the calculation. For example, if the borrower has an annuity and a salary, both incomes can be taken into account to cover the loan.

Is it possible to get a bigger mortgage by adding the income of a family member?  

If your income is not enough to cover the requested amount, you can add additional borrowers and their income sources to the application. It is possible to have up to three family members on one loan. Keep in mind that all creditors are equally liable for the loan.

How is the mortgage amount calculated depending on the amount of income?

Based on your income, the bank will calculate your monthly mortgage payment. Based on the calculated monthly mortgage payment and  requested time period, the bank will calculate the maximum amount of your loan. For loans issued in lari, you can estimate a monthly payment of 25%-60% of your income, and for loans issued in foreign currency, up to 25%-40%. Accordingly, with large incomes, you can take a loan for a large amount in lari. 

How is the loan amount calculated based on the collateral value?

Collateral requirements have a value for loans issued in lari and in foreign currencies. For loans issued in lari, the loan amount should be maximum 85% of the loan amount issued. In a foreign currency, it’s 70%. For example, if a residential apartment with a market value of 100,000 lari is secured by a mortgage, it will be possible to borrow 85,000 lari. 

One more note about down payments.

Non-residents generally pay 30% of the cost of the property as a down payment. The higher downpayment you offer, the less bureaucracy with documents you will experience (because there is less risk to the bank with a larger down payment). 

How to start the process?

Theoretically, it is “easy -peasy”. We advise you not to correspond with the bank via their websites or email (language barriers are a real thing with the support staff), but go directly to their branches. If you are planning to buy a property, you can first get approved for a loan and then look for the property you want. The application itself takes about 30 minutes to complete. You can also contact us and we will connect you with mortgage agents who speak your native language.

How do the banks verify income?

If you receive income in a Georgian bank account, confirmation of income is possible automatically. In other cases, depending on income, you can provide bank statements, your  rental income receipts and other sources of regular deposits to your foreign bank account. After filling out the application, the mortgage agent will tell you what else they might need. The verification process can take anywhere from a few seconds to 2-4 business days.

How to calculate down payment?

When buying an apartment, a bank representative makes a quick estimate and then calculates the down payment amount. The bank will require cadastral code for the apartment and will send their appraiser to the property for an official valuation estimate. The whole procedure takes about 2 working days.

How long does it take to have a mortgage approved?

Banks claim that a decision on a loan is usually made within one hour. Let’s be realistic, for residents of other countries, the process may take longer. This applies especially to citizens of Russia, Belarus and Ukraine.

What should citizens of Ukraine, Russia and Belarus take into account when applying?

All three countries are currently in areas of high financial risk, so banks consider applications individually. If you receive income in above mentioned countries, given the high financial risk factor at the moment, the bank may refuse to issue a mortgage. But! There are other possibilities. If you receive income from other countries, or you already have an account in a Georgian bank, then this already gives a chance for a positive decision. For more questions or advice on this, please contact us.

In what currencies can I borrow?

Foreigners can get loans in euros, US dollars and Georgian lari (GEL). There is an exception for citizens of Georgia. The mortgage will be required in the national currency if the issued amount is less than 200,000 Gel . As a foreigner, you can take any amount of the loan in the currency you want.

Interest rates in lari are high, as lari is slowly depreciating against the US dollar and euro in recent years. If you earn income in a stronger currency – good for you.

Can I get a mortgage online without visiting Georgia?

The answer is No. You will need to plan a visit to Georgia, to have a personal meeting at the bank. If you are buying from a developer, the loan process may take less time than buying an owner’s property. However, you should still plan to spend at least one week in Tbilisi for any follow-up questions the bank may have for you. You can select an apartment online, but need to be in Georgia to open a bank account, and negotiate a mortgage with the bank. We recommend to spend at least two working weeks in Tbilisi if you are planning to buy a secondary property. The bank will need to send an appraiser to inspect the property before they agree on a maximum loan amount.

For documentation you should bring a proof of income, such as bank statements.

You can find up-to-date information about the current conditions of popular banks on their websites:

TBC mortgage terms https://tbcmortgage.ge/

BOG mortgage conditions https://bankofgeorgia.ge/en/retail/loans/mortgage

If you need English-speaking mortgage agent, write to us and we will give you recommendations [email protected]

If the blog was useful to you or if you have additional questions, please leave a comment.