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Residential property renovation loan in USD*

Loan terms1
 From 24 months up to 1202 months.
Loan amount
 From USD 6,000 to up to USD 70,000.
Loan to Value Ratio

Loan amount cannot exceed:

  • 50% of the property value if located in Yerevan or prospective suburbs
  • 25% of the property value if located elsewhere in Armenia
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
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:


 

3.2% + 6.8% = 10%
3.2% + 5.8% = 9% for Plus and Status customer

 

where:

3.2% - Bank’s USD Retail Base Rate

5.8%, 6.8% - Constant margin for property renovation loans in USD

 

Annual percentage rate - from 10.93% up to 15.30%.

Annual percentage rate for PLUS and STATUS customers - from 9.80% up to 13.54%.

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 provision fee (one-off)4

1% of loan amount (equivalent in AMD), maximum AMD 100,000.

Loan provision fee will be charged from the customer's account on loan provision day.

 

In case charged in foreign currency, Bank respective rate for subject currency is being applied.
Loan terms1
 Loan amount
From 24 months up to 1202 months.
 From USD 6,000 to up to USD 70,000.
Loan terms1
 Loan to Value Ratio
From 24 months up to 1202 months.

Loan amount cannot exceed:

  • 50% of the property value if located in Yerevan or prospective suburbs
  • 25% of the property value if located elsewhere in Armenia
Loan terms1
 Debt to Income Ratio
From 24 months up to 1202 months.
  • 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 terms1
 Interest rate3
From 24 months up to 1202 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 USD loans this is calculated at Bank’s USD retail base rate plus constant margin and is currently equal to:


 

3.2% + 6.8% = 10%
3.2% + 5.8% = 9% for Plus and Status customer

 

where:

3.2% - Bank’s USD Retail Base Rate

5.8%, 6.8% - Constant margin for property renovation loans in USD

 

Annual percentage rate - from 10.93% up to 15.30%.

Annual percentage rate for PLUS and STATUS customers - from 9.80% up to 13.54%.

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 terms1
 Loan provision fee (one-off)4
From 24 months up to 1202 months.

1% of loan amount (equivalent in AMD), maximum AMD 100,000.

Loan provision fee will be charged from the customer's account on loan provision day.

 

In case charged in foreign currency, Bank respective rate for subject currency is being applied.

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 Loan term from 85 months to 120 months for Renovation loans and from 241 months to 300 months for Purchase loans are applicable for HSBC Bank Armenia payroll customers only. Loan term from 180 months to 300 months is applicable for buy-to-live purpose only, with maximum loan amount of USD 250,000.

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

4 0,5% of loan amount, maximum AMD 100,000 for PLUS and STATUS customers.

You are eligible to apply for a residential property renovation 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 local 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)

*Subject loan is applicable solely to non RA resident Armenian nationals (excluding when the co-borrower is a resident of RA).

1 Mortgage 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.

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

3 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

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 renovation 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 - 9.60%
  • 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 100,000
  • 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 renovation 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 – 9.63%
  • 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 100,000
  • 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: 25.04.24, 06:18

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