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Residential property purchase loan in USD

Residential property purchase loan in USD

Loan amount

From USD 10,000 to up to USD 400,0002.

Loan terms1

  • 24-240 months with floating interest rate
Interest rate3

Annual nominal interest rate – floating


 

Important: The nominal interest rate may be changed by the bank in case of bank retail base rate changes.


 

Floating nominal interest rate can be changed during the loan lifecycle no more than 2 times in a year. Maximum and minimum thresholds are set for the nominal interest rate of the loan, which cannot be exceeded during the lifecycle of the loan. In case of floating interest, the maximum increase and decrease of the threshold of the nominal interest rate is defined as +/-7 interest point․


 

For USD loans this is calculated at Bank’s USD retail base rate plus constant margin and is currently equal to:


 

3.3% + 5.7% = 9%

3.3% + 4.7% = 8% for Plus and Status customers


 

Where:

3.3% - Bank’s USD Retail Base Rate

4.7%, 5.7% - Constant margin for purchase loans in USD

 

Annual percentage rate starting from 9.66% up to 12.74%

Annual percentage rate for Plus and Status customers starting from 8.56% up to 10.96%
 
 

For the calculation of APR the foreign exchange rate published on Central Bank official website is being used. The APR may vary as a result of the above-mentioned rate change.
 
 

Loan interest amount is calculated based on the annual nominal interest rate, whereas the annual percentage rate or APR indicates how much the loan would cost to the borrower in case of repayment of interest amount and other payments under the defined timeline and terms.
 
 

Loan interest is calculated in the loan currency on a daily basis for 365 days and for 366 days in case of leap year on the loan outstanding balance.

Loan to Value Ratio
Loan maximum amount:

 

85% from the value of the property subject to purchase in case property is located in Yerevan and additional property located in the territory of RA is pledged, provided the loan does not exceed 70% of the total valuation amount of the subject to purchase and additional pledged property. Respectively minimum prepayment arranged by customer is 15%. Only one additional property can be taken as a pledge.

 

70% from the value of the property subject to purchase in case property is located in Yerevan and no additional property is pledged. Respectively minimum prepayment arranged by customer is 30%.

 

50% from the value of the property subject to purchase in case property is located outside Yerevan in the territory of RA, if additional property located in RA is pledged. Respectively minimum prepayment arranged by customer is 50%.

 

30% from the value of the property subject to purchase in case property is located outside Yerevan in the territory of RA, if no additional property is pledged. Respectively minimum prepayment arranged by customer is 70%.


Loan amount is calculated based on the lower of the current market value as per the property valuation act and property purchase price.

Debt to Income Ratio
  • For customers whose income is 100% in USD, the ratio of overall loan payments to net monthly income cannot exceed 60%, regardless of monthly income
  • For customers whose USD income comprises 50% or more of their monthly income, the following will apply:

- 40%, if net monthly salary / income is < AMD350,000 and

- 50%, if net monthly salary/ income is ≥ AMD350,000

  • For customers whose USD income comprises less than 50% of their total income, USD loan amount and DIR will be calculated so that monthly loan repayment amount in USD is fully matched by the USD share in customer’s total income and the following will apply:

- 40%, if net monthly salary / income is < AMD350,000 and  

- 50%, if net monthly salary/ income is ≥ AMD350,000

Loan provision fee (one-off)
1% of loan amount (0.5% for Plus and Status customers), maximum AMD 200,000.  Loan provision fee will be charged from the customer's account on loan provision day. 
 

Residential property purchase loan in USD

Loan amount

Loan terms1

From USD 10,000 to up to USD 400,0002.
  • 24-240 months with floating interest rate

Loan amount

Interest rate3
From USD 10,000 to up to USD 400,0002.

Annual nominal interest rate – floating


 

Important: The nominal interest rate may be changed by the bank in case of bank retail base rate changes.


 

Floating nominal interest rate can be changed during the loan lifecycle no more than 2 times in a year. Maximum and minimum thresholds are set for the nominal interest rate of the loan, which cannot be exceeded during the lifecycle of the loan. In case of floating interest, the maximum increase and decrease of the threshold of the nominal interest rate is defined as +/-7 interest point․


 

For USD loans this is calculated at Bank’s USD retail base rate plus constant margin and is currently equal to:


 

3.3% + 5.7% = 9%

3.3% + 4.7% = 8% for Plus and Status customers


 

Where:

3.3% - Bank’s USD Retail Base Rate

4.7%, 5.7% - Constant margin for purchase loans in USD

 

Annual percentage rate starting from 9.66% up to 12.74%

Annual percentage rate for Plus and Status customers starting from 8.56% up to 10.96%
 
 

For the calculation of APR the foreign exchange rate published on Central Bank official website is being used. The APR may vary as a result of the above-mentioned rate change.
 
 

Loan interest amount is calculated based on the annual nominal interest rate, whereas the annual percentage rate or APR indicates how much the loan would cost to the borrower in case of repayment of interest amount and other payments under the defined timeline and terms.
 
 

Loan interest is calculated in the loan currency on a daily basis for 365 days and for 366 days in case of leap year on the loan outstanding balance.

Loan amount

Loan to Value Ratio
From USD 10,000 to up to USD 400,0002.
Loan maximum amount:

 

85% from the value of the property subject to purchase in case property is located in Yerevan and additional property located in the territory of RA is pledged, provided the loan does not exceed 70% of the total valuation amount of the subject to purchase and additional pledged property. Respectively minimum prepayment arranged by customer is 15%. Only one additional property can be taken as a pledge.

 

70% from the value of the property subject to purchase in case property is located in Yerevan and no additional property is pledged. Respectively minimum prepayment arranged by customer is 30%.

 

50% from the value of the property subject to purchase in case property is located outside Yerevan in the territory of RA, if additional property located in RA is pledged. Respectively minimum prepayment arranged by customer is 50%.

 

30% from the value of the property subject to purchase in case property is located outside Yerevan in the territory of RA, if no additional property is pledged. Respectively minimum prepayment arranged by customer is 70%.


Loan amount is calculated based on the lower of the current market value as per the property valuation act and property purchase price.

Loan amount

Debt to Income Ratio
From USD 10,000 to up to USD 400,0002.
  • For customers whose income is 100% in USD, the ratio of overall loan payments to net monthly income cannot exceed 60%, regardless of monthly income
  • For customers whose USD income comprises 50% or more of their monthly income, the following will apply:

- 40%, if net monthly salary / income is < AMD350,000 and

- 50%, if net monthly salary/ income is ≥ AMD350,000

  • For customers whose USD income comprises less than 50% of their total income, USD loan amount and DIR will be calculated so that monthly loan repayment amount in USD is fully matched by the USD share in customer’s total income and the following will apply:

- 40%, if net monthly salary / income is < AMD350,000 and  

- 50%, if net monthly salary/ income is ≥ AMD350,000

Loan amount

Loan provision fee (one-off)
From USD 10,000 to up to USD 400,0002.
1% of loan amount (0.5% for Plus and Status customers), maximum AMD 200,000.  Loan provision fee will be charged from the customer's account on loan provision day. 
 

Please read loan Terms and Conditions before applying.

1 Customer's minimum age is 18. Customer's age plus the loan term should not exceed 65 years.

2 For facilities with over 180 months term and 70%-85% LTV ratio maximum loan facility is limited to USD 250K.

3 Depending on risk assessment results, loan application may be approved at a higher interest rate.

You are eligible to apply for a residential property purchase loan if you meet the below minimum criteria1

Salaried account holders

You are an Armenian national or Armenian resident2

and

  • Have an account with HSBC Bank Armenia CJSC (hereafter the Bank) and at least 3 months employment with a company maintaining satisfactory banking relationship with the Bank, and your net monthly salary is at least AMD 200,000 or USD 500

or

  • Have an account with the Bank and at least 3 months employment with a company maintaining accounts with other banks in RA, and your net monthly salary is at least AMD 200,000 or USD 500. Salary should be transferred to your account with the Bank after loan drawdown (in case if prior salary transfer is not required by the Bank)3

or

  • Have an account with any other bank with at least 3 months employment history and salary being transferred to your account for 3 months, and your net monthly salary is at least AMD 250,000 or USD 600

Non-salaried account holders

  • You are an Armenian national or Armenian resident2

and

  • Have satisfactory account record and banking relationship with the Bank for a period of 3 months and more, and the last 3 months average monthly balance and average balance of the last month have been at least AMD 200,000 or USD 500 (or equivalent in other currency)

or

  • Have satisfactory account record and banking relationship with other local banks for a period of 3 months and more, and the last 3 months average monthly balance and average balance of the last month have been at least AMD 250,000 or USD 600 (or equivalent in other currency)

1Mortgage loans in USD can be provided only to customers who have income in USD (full or partial), or whose income in AMD is linked to USD exchange rate. The Bank may require documents evidencing the income currency, or the income link to USD exchange rate.

2Persons with minimum 1 year of residence in Armenia proven by respective documents are considered as Armenian residents.

3The requirements on salary transfer to your account with the Bank will be communicated to you during the loan approving process.

Loan repayment

The following repayment options are available for the borrowers:

  • principal is repaid in equal monthly instalments, while interest amount decreases with the repayment of a principal. Therefore, monthly repayments will decrease over the loan tenor
  • repayments are calculated on annuity basis, where both principal and interest monthly repayment amounts change over the loan tenor, while the total monthly repayment amount remains constant

Note: Fluctuation of foreign currency exchange rate may impact the loan repayment amount (for USD Loans). Interest for the loans with foreign currency can be paid either with the currency of the loan or in Armenian Drams as per customer’s preference and based on the provided respective instruction.

If the borrower does not pay the interest and loan principal amounts in time, information about credit history will be submitted to the Central Bank of Armenia and ACRA Credit Reporting CJSC within three business days of credit facility overdue, resulting in negative impact on borrower’s credit history, should the borrower decide to apply for another loan in the future. In case of existence the reporting is applicable for guarantors and co-borrowers as well.

In case loan monthly repayments are not processed in line with the loan schedule and loan agreement and in case you do not properly meet your loan obligations, your property may be repossessed and you may be deprived of your rights over it.

Interest amount calculation

Interest amount will be calculated on a daily basis by using the following formula:

I = R*L/365, where

I = one day interest amount

R = current interest rate

L = outstanding amount of loan

Representative examples of interest amount calculation

Example 1. House purchase loan in USD with annuity repayment type was provided to the customer.

  • Loan amount - USD 50,000
  • Loan term - 120 months
  • Annual interest rate - 9%
  • Annual percentage rate - 9.70%
  • Days in a year - 365/366
  • Loan provision date - 01/03/2019
  • First repayment date - 01/04/2019
  • Loan full repayment date - 01/03/2029
  •  Loan one-off provision fee - AMD 200,000
  • Monthly repayment amount USD 633.38, out of which

Interest amount for the first month - USD 382.19

Interest amount for the second month - USD 368.00

Interest amount for the last month - USD 4.60

Interest amount for the whole period of loan is USD 26,043.05

Example 2. House purchase loan in USD with Reducing repayment type was provided to the customer.

  • Loan amount - USD 50,000
  • Loan term - 120 months
  • Annual interest rate - 9%
  • Annual percentage rate – 9.74%
  • Days in a year – 365/366
  • Loan provision date - 01/03/2019
  • First repayment date - 01/04/2019
  • Loan full repayment date - 01/03/2029
  •  Loan one-off provision fee - AMD 200,000
  • Monthly repayments

For the first month - USD 798.86 (out of which interest amount is USD 382.19)

For the second month - USD 783.45 (out of which interest amount is USD 366.78)

For the last month - USD 419.54 (out of which interest amount is USD 2.88)

Interest amount for the whole period of loan is AMD equivalent of USD 22,703.08

Things you should know

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In case loan monthly repayments are not processed in line with the loan schedule and loan agreement and in case you do not properly meet your loan obligations, your property may be repossessed and you may be deprived of your rights over it.

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Last updated on: 09.05.22, 06:11

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