Residential Property Renovation Loan

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Residential property renovation loan in AMD

Residential property renovation loan in AMD
Loan terms¹	From 24 months up to 120 months.
Loan amount	From AMD 3 million up to AMD 35 million.
Loan to Value Ratio	Loan amount cannot exceed: 50% of the property value in case if property is located in Yerevan or prospective suburbs 25% of the property value, if property is located elsewhere in Armenia
Debt to Income Ratio	The ratio of overall loan payments to net monthly income cannot exceed 60% if net monthly income is less than AMD 700,000 and 70%, if net monthly income is greater than or equal to AMD 700,000.
Interest rate²	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 AMD loans, this is calculated at Bank’s AMD retail base rate plus constant margin and is currently equal to: 9% + 4% = 13% 9% + 3.5% = 12.5% for PLUS and STATUS customers Where: 9% - Bank’s AMD Retail Base Rate 3.5%, 4% - Constant margin for renovation loans in AMD Annual percentage rate - from 14.22% up to 18.24%. Annual percentage rate for PLUS and STATUS customers - from 13.63% up to 16.97%. 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 provision fee (one-off)³	1% of loan amount, maximum AMD 100,000.

Residential property renovation loan in AMD
Loan terms¹	Loan amount
From 24 months up to 120 months.	From AMD 3 million up to AMD 35 million.

Loan terms¹	Loan to Value Ratio
From 24 months up to 120 months.	Loan amount cannot exceed: 50% of the property value in case if property is located in Yerevan or prospective suburbs 25% of the property value, if property is located elsewhere in Armenia

Loan terms¹	Debt to Income Ratio
From 24 months up to 120 months.	The ratio of overall loan payments to net monthly income cannot exceed 60% if net monthly income is less than AMD 700,000 and 70%, if net monthly income is greater than or equal to AMD 700,000.

Loan terms¹	Interest rate²
From 24 months up to 120 months.	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 AMD loans, this is calculated at Bank’s AMD retail base rate plus constant margin and is currently equal to: 9% + 4% = 13% 9% + 3.5% = 12.5% for PLUS and STATUS customers Where: 9% - Bank’s AMD Retail Base Rate 3.5%, 4% - Constant margin for renovation loans in AMD Annual percentage rate - from 14.22% up to 18.24%. Annual percentage rate for PLUS and STATUS customers - from 13.63% up to 16.97%. 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 terms¹	Loan provision fee (one-off)³
From 24 months up to 120 months.	1% of loan amount, maximum AMD 100,000.

Please read loan Terms and Conditions before applying.

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

²Depending on risk assessment results, loan application may be approved at a higher interest rate.

³0,5% of loan amount for PLUS and STATUS customers, maximum AMD 100,000.

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

Salaried account holders

You are an Armenian national or Armenian resident¹

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

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. 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)²

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

Non-salaried account holders

You are an Armenian national or Armenian resident¹

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 equivalent in other currency)

Have satisfactory account record and banking relationship with other 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 equivalent in other currency)

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

² The 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

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 3 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 renovation loan in AMD with Annuity repayment type provided to the customer.

loan amount - AMD 25,000,000
loan term - 120 months
annual interest rate – 12.5%
annual percentage rate - 13.73%
days in a year - 365/366
loan provision date - 01/09/2022
first repayment date - 05/10/2022
loan full repayment date - 06/09/2032
loan one-off provision fee - AMD 100,000
monthly repayment amount AMD 365,940.42, out of which

interest amount for the first month - AMD 291,095.89

interest amount for the second month - AMD 264,616.38

interest amount for the last month - AMD 5,154.94

Interest amount for the whole period of loan is AMD 19,023,741.78.

Example 2. House renovation loan in AMD with Reducing repayment type provided to the customer.

loan amount - AMD 25,000,000
loan term - 120 months
annual interest rate – 12.5%
annual percentage rate - 13.81%
days in a year - 365/366
loan provision date - 01/09/2022
first repayment date - 05/10/2022
loan full repayment date - 06/09/2032
loan one-off provision fee - AMD 100,000
monthly repayments

repayment for the first month - AMD 499,429.22 (out of which - interest amount AMD 291,095.89)

repayment for the second month - AMD 471,532.53 (out of which - interest amount AMD 263,199.20)

repayment for the last month - AMD 210,610.20 (out of which - interest amount AMD 2,276.87)

Interest amount for the whole period of loan is AMD 15,787,484.87.

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Last updated on: 25.04.24, 06:18