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Residential property purchase refinancing loan – crediting details

Main terms and conditions

Terms
Details
Special offer

2% lower interest rate from your effective interest rate


 

Fixed interest rate for 1 to 36 months

Floating interest rate starting from 37th month

Interest rate

9.9% to 12%

9.9% to 11% for PLUS and STATUS customers


 

Annual percentage rate

10.60% to 13.25%

10.60% to 12.13% for PLUS and STATUS customers


 

Important: LOAN FLOATING INTEREST RATE CAN BE CHANGED IN CASE OF BANK’S AMD RETAIL BASE RATE CHANGE.

Loan amount and term
AMD 5 to 200 mln | 60 to 240 months
Loan to value ratio

Loan to value ratio - maximum 90%


 

For loans exceeding 100 mln and with 90% loan to value ratio a secondary pledge is required.

Debt to income ratio
The ratio of all loan payments to net monthly income 60 to 70% depending on the income.
Terms
Special offer
Details

2% lower interest rate from your effective interest rate


 

Fixed interest rate for 1 to 36 months

Floating interest rate starting from 37th month

Terms
Interest rate
Details

9.9% to 12%

9.9% to 11% for PLUS and STATUS customers


 

Annual percentage rate

10.60% to 13.25%

10.60% to 12.13% for PLUS and STATUS customers


 

Important: LOAN FLOATING INTEREST RATE CAN BE CHANGED IN CASE OF BANK’S AMD RETAIL BASE RATE CHANGE.

Terms
Loan amount and term
Details
AMD 5 to 200 mln | 60 to 240 months
Terms
Loan to value ratio
Details

Loan to value ratio - maximum 90%


 

For loans exceeding 100 mln and with 90% loan to value ratio a secondary pledge is required.

Terms
Debt to income ratio
Details
The ratio of all loan payments to net monthly income 60 to 70% depending on the income.

Attention:  Refinancing related costs for property valuation, notary service and for provision of certificate on restrictions from State Cadastre Committee will be borne by the Bank, except for pledge registration fee and property insurance fee.

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. 

Eligibility criteria

You are eligible to apply for a residential property purchase loan if you are an Armenian national or Armenian resident1 and meet the following minimum criteria:
Salaried account holders

Non-salaried account holders

  • Have an account with HSBC Armenia
  • Minimum 3 months’ employment history in a company servicing with the Bank or any other Bank
  • Minimum AMD 200,000 net monthly salary

 

Or

  • Have an account with other bank
  • Minimum 3 months’ employment history
  • Minimum AMD 250,000 net monthly salary
  • Have held an account with HSBC for at least 3 months
  • Min average balance for the last 3 months and the last month – AMD 200,000

 

Or

  • At least 3 months’ record with other Bank
  • Min average balance for the last 3 months and the last months – AMD 250,000

 

 

 

 

 

 

 

 

You are eligible to apply for a residential property purchase loan if you are an Armenian national or Armenian resident1 and meet the following minimum criteria:
Salaried account holders
  • Have an account with HSBC Armenia
  • Minimum 3 months’ employment history in a company servicing with the Bank or any other Bank
  • Minimum AMD 200,000 net monthly salary

 

Or

  • Have an account with other bank
  • Minimum 3 months’ employment history
  • Minimum AMD 250,000 net monthly salary

Non-salaried account holders

  • Have held an account with HSBC for at least 3 months
  • Min average balance for the last 3 months and the last month – AMD 200,000

 

Or

  • At least 3 months’ record with other Bank
  • Min average balance for the last 3 months and the last months – AMD 250,000

 

 

 

 

 

 

 

 

*Salary should be transferred to your account with the Bank after loan drawdown (in cases where prior salary transfer is not required by the Bank).

1 Within the framework of this offer, people with a minimum 1 year of residence in Armenia proven by respective documents are considered as Armenian residents. Customer's minimum age must be 18. Customer's age plus the loan term should not exceed 65 years.

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.

 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 after 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. Where relevant, the reporting is applicable for guarantors and co-borrowers as well.

If loan obligations are not properly met, the property may be repossessed and you may be deprived of your rights over it.

In case you have outstanding obligations towards the creditor, the following repayment order will apply, when you fulfil your obligations:

  1. Penalties
  2. Interest
  3. Principal

Early repayment

You can make loan early repayments by decreasing the outstanding loan amount as follows:

  1. By equally reducing the amount of monthly payments and leaving the loan term fixed, or
  2. By reducing the loan term by leaving monthly payments fixed.

Note: In case of early repayment, the property pledging fee and insurance fee are not subject to proportional decrease. 

Default interest rate and penalties

In case of overdue/default on loan principal and/or interest the Bank will apply penalty interest rate - 5% p.a. plus the loan nominal interest rate per annum, on the overdue amount.

For loan principal early repayment, the Bank may apply an early repayment fee:

  • calculated at 0.6% of the amount overpaid during the first year
  • calculated at 0.4% of amount overpaid during the second year
  • calculated at 0.2% of amount overpaid during the third year.

At any point in a year no overpayment fee is applicable for the amount overpaid for the amount equal to the sum of principal payments for the contractual year according to the schedule. In this term contractual year is considered the 12-month period starting from the next day of the loan agreement date.

Warning and important notes

The loan will be transferred to customer’s bank account.

Floating rate comprises of effective retail base rate and fixed margin (defined at the time of refinancing as per customer segment). Refinancing agreement will explicitly specify interest rate structure for both fixed and floating rates, including possible rate amendments and changes as a result of potential downgrades from STATUS/PLUS to Mass during the loan lifetime. 

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 interests, the maximum increase and decrease of the threshold of the nominal interest rate is defined as +/-7 interest point. The respective clause is mandatory part of the loan agreement.

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 using the following formula.

I = R*L/365, where

I = one day interest amount

R = current interest rate

L = outstanding amount of loan

If the borrower fails or regularly delays the loan repayment or any of obligations specified in loan agreement, the Bank reserves the right to repossess the pledged residential property, without recourse to the court and use the sales proceeds for full repayment of the loan outstanding amount.

In case if the value of such pledged residential property is not sufficient to cover the borrower's obligations, the obligations may be paid-off at the expense of the borrower's other property, in accordance with the RA legislation.

If the property prices in the market are demonstrating negative trend of 20% and more, the Bank may require additional re-evaluation of pledged property.

Attention: The Customer orders the Bank to transfer the loan full amount to his/her account in another financial institution, based on a written notice/extract/ from the respective financial institution about the total sum of debt, in which the stated total sum of the debt may not exceed the amount stipulated in the loan agreement with the Bank. In case, the amount of Customer’s financial obligation to the other financial organization /including accrued interests, penalties, fines and other payments /exceeds the loan amount stipulated in the loan agreement with the Bank, the Customer should cover the exceeding amount from his/her personal proceeds/funds, by transferring the sum to the respective account opened in the Bank- in order to fully execute his/her financial obligations towards the other financial organization.

Information for guarantor

When providing guarantee, the guarantor should acknowledge all the consequences of the guarantee provision, including full repayment of the obligation and applicable penalties, negative impact on the guarantor’s credit history and even repossession of the guarantor’s property, in case the borrower does not perform their obligations.

The Bank is obliged to:

  • provide examples of credit, guarantee agreements and repayment schedule
  • communicate with you by your preferred channel
  • notify you about the changes to the terms of the agreement 7 days prior to those changes are made
  • remind you about the loan obligation one day prior to its due date
  • notify you about delayed loan repayments at latest 1 day after the delay.

You have the right to:

  • request information from the Bank on the loan residual amount at any time
  • claim from the borrower the loan amount paid by you, as well as other losses borne by you instead of the borrower.

Required documents

  • valid passport, residency card or Identification card (ID).
  • documents certifying customer income (salary/income certificate, bank statement, tax report, rent agreement, etc.)
  • ownership Certificate and the basis of acquisition of the residential property
  • valuation report of the residential property. The valuation is arranged by the Bank at the Bank’s cost on behalf of the customer via any of the cooperating independent valuator companies
  • a combined certificate issued by the State Committee of Cadaster on restrictions in respect of the residential property (original)
  • loan agreement and advice on outstanding loan amount of the loan to be refinanced
  • other documents that may be required during loan application process.

Security and insurance

  • The residential property is pledged to the Bank until the full repayment of the loan.
  • For residential property purchase loans, the customer, hereafter also borrower, must have the ownership right to the residential property to be pledged.
  • If the loan is provided for purchase of residential property from primary market and it is under construction, (i.e. no Ownership Certificate is available for the property) the borrower will be asked to secure the loan by pledging any other privately owned residential property. Once the final Ownership Certificate of the completed residential property is issued it should be pledged to the Bank. All the documents related to and verifying the purchase of a new residential property should be submitted to the Bank for arranging pledge latest by the end of the 12th month.
  • Borrower must provide pledged property insurance opting from suggested list of insurers. The insurance policy should be reissued every year within the whole term of agreement. Should the borrower fail to arrange the insurance, the Bank will arrange insurance at the borrower's cost
  • Beneficiary rights of the insurance policy will be entitled to the borrower.
  • Insurance can be done either by full market value of the property or by loan amount upon borrower's discretion. If the property is insured for part of its value insurance compensation will be paid in the same proportion ratio of the sum insured and the property's full market value.
  • The Bank reserves the right to demand early repayment of the loan, if insurance terms of the pledged residential property specified in residential property mortgage agreement are breached.
  • The Bank may require the customer’s obligations to be secured with guarantee at its discretion, based on risk assessment results.

Deadlines for decision making and loan provision

The Bank makes the decision on provision of loans at its discretion, taking into consideration the conformity of the loan application to the announced requirements of the given loan type as well as evaluating such essential factors as the creditworthiness of the applicant, any overdue payments, liquidity of the pledged property and other factors.

Final decision and customer notification - 2 to 5 working days after the submission of all other necessary documentation as requested by the bank.

Loan provision/drawdown – within 2 working days after the signing pledge agreement.

Loan approval criteria:

  • Documented and stable income, which corresponds to the minimum set requirements for a particular loan type.
  • Good credit history, with number of overdue days for all loans during the recent 12 months not exceeding maximum threshold set by the bank.
  • Full document set required for the loan process.
Loan declination criteria:
 
  • Insufficient funds for servicing the loan, or undocumented income.
  • Information that the loan will not be used for designated purpose.
  • Incorrect and incomplete information provision as part of the loan process.
  • Bad credit history, with number of overdue days for all loans during the recent 12 months not exceeding maximum threshold set by the bank.
  • Customer age does not meet the age related criteria for the specific loan type.

Statements

The bank will provide customers with statements for their loan accounts in the manner and terms stipulated by the RA legislation. The statements can be delivered to the customer's postal address, sent via email or collected from any branch of the bank. You can familiarise yourself with the conditions, terms and fees for provision of statements, copies of statements or other information by referring to Tariff of Charges and Terms and Conditions

How to apply

Apply by phone

Call our contact centre on +374 60 655 000 or fill a callback request form

Apply in branch

You can apply for the loan both at the HSBC main office and our branches. Find the location that’s most convenient for you. 

Last updated on: 07.09.20, 11:55