Be sure to read this article before taking a mortgage in Georgia to avoid mistakes and overpayments.

Many foreigners, inspired by the nature of Georgia and favourable purchase conditions, think about buying property here. And the first question that arises is: ‘Is it possible to take a mortgage?’ The answer is not as simple as it may seem at first glance. Banks willingly offer attractive conditions, but behind them can hide important details that are worth knowing in advance.  

In this article we will look at how mortgages in Georgia work for non-residents, what conditions are offered by local banks, as well as share tips that will help avoid unpleasant surprises.  

Can a foreigner get a mortgage in Georgia?  

The short answer is yes, it is possible. But there are some nuances.  

- The main requirements: To apply for a mortgage, a foreigner needs to prove a stable income. Banks will carefully check your financial status, especially if the income comes from abroad.  

- Differences in conditions: If for Georgian citizens it is enough to make 10% of the property value as a down payment, then for foreigners this bar is higher - usually 20%. Also, mortgage interest in Georgia for non-residents may be higher than for locals.

- The decision depends on the bank: Some banks are more loyal to foreign clients, especially if the property is purchased through a trusted developer.  

How do banks screen a borrower? 

To ensure the credibility of the lender, Georgian banks thoroughly vet potential borrowers. Here are the main steps:  

- Credit history analysis: Although there is no single credit database, banks can request information about your credit history in other countries through international credit bureaus.  

- Financial document analysis: All income statements are scrutinised thoroughly. Banks require the borrower to provide income statements, bank statements and even tax returns.  

- Employer verification: Often banks will contact your employer to confirm employment and salary details.  

- Debt load analysis: All your current liabilities are assessed to see if you can service the additional debt in the form of a mortgage.  

- Property valuation: Banks carry out an independent valuation of the property to ensure that its stated value is adequate.  

Which banks work with foreign borrowers?  

There are several large banks in Georgia that actively provide mortgage loans. Among them:  

- TBC Bank  

- Bank of Georgia  

- Liberty Bank  

Each of them offers different terms and conditions. It is important to understand the key points:  

- Down payment: The National Bank of Georgia has recently lowered the minimum for foreign borrowers from 30% to 20%.  

- Interest rates: For mortgages in local currency (GEL) rates start from 8-9%, in foreign currencies (e.g. dollars) they can be higher.  

- Loan term: For mortgages in GEL, the term can be up to 20 years, and in dollars or euros - up to 10 years.  

- The loan limit is $500,000 or the equivalent amount in another currency.

To obtain a loan, you will need: passport, income certificate, documents for the property, and sometimes additional information about your financial situation.  

Pitfalls of Georgian mortgages  

At first glance, everything seems simple: choose a bank, submit documents, get a loan. However, there are important aspects to be aware of.  

1. Hidden fees and charges  

Be prepared for the fact that mortgage costs are not limited to monthly payments only. For example:  

- Mandatory life insurance of the borrower (0.72% of the loan amount per year).  

- Property insurance (0.28%).  

- Payment for the services of an appraiser, notary, and the bank's processing fees.  

2. Currency fluctuations  

Most foreign borrowers take out a mortgage in a currency, but their income may be received in another currency. This creates currency risks: if the exchange rate changes, your monthly payments may increase significantly. 

3. Interest rates  

Although banks offer fixed rates for the first 5 years, after this period the interest will be recalculated. The new rate is linked to the refinancing rate of the National Bank of Georgia.  

It is important to distinguish between advertised and real rates. Often clients are offered tempting conditions, but at a personal meeting it turns out that they are not so favourable. This is especially true for those who are in another country and do not speak the local language. 

4. Denial of credit  

Even if you have an income, the bank may refuse to issue a loan. The reason may be insufficient credit history, high debt load or other factors that are not always explained to you.  

How to avoid mistakes and choose favourable terms?  

To make a mortgage in Georgia a really good decision, stick to the following recommendations:  

- Study the offers of property developers. Often they co-operate with banks and offer favourable terms. For example, TBC Bank has a special section on its website where you can find out about current offers from property developers.  

- Prepare documents in advance. The more information you provide about your income and your financial stability, the higher the chance of getting approval.

- Get counselling. Before signing the contract, it is recommended to consult with a lawyer or mortgage broker who knows all the nuances of Georgian law.  

Conclusion 

Getting a mortgage in Georgia for foreigners is a realistic task, especially in view of recent relaxations from the National Bank: the minimum down payment has been reduced, conditions for those who receive income from abroad have improved.  

But it is important to understand all the hidden nuances: commissions, interest rates, currency risks and even possible costs of transaction support. Full awareness will help to avoid problems in the future.  

Do you want to make a sweat in Georgia without unnecessary worries? Entrust the matter to experts who will take into account all the nuances and make the process as comfortable and fast as possible for you. Leave a request for a free consultation.