The Bank of Mongolia (BoM) has decided to implement the next 8-percent interest rate mortgage program with total investment of MNT 240 billion.
The BoM and commercial banks will provide MNT 120 billion each for the program, The central bank will provide fund using the principals repayment of its mortgage-backed securities, and commercial banks will provide funding of not less than the sum provided by BoM to mortgage loans.
The mortgage program will begin after the central bank amends its residential mortgage lending regulation and enters into agreements with commercial banks in accordance with the Law on COVID-19 prevention, fight, and mitigation of its socioeconomic impact and the Parliamentary Resolution No. 32 of 2020.
The program targeting mostly low and middle income groups will run from May 2020 until the end of this year. For successful implementation of the MNT 240 billion program, BoM requires that:
• the amount of a loan financed with the sum provided by BoM not exceed MNT 100 million;
• not less than 25 percent of the sum provided by BoM be loaned to citizens buying homes in rural areas;
• all of the sum provided by BoM be used for new mortgages only;
• 15 percent of the sum provided by BoM be loaned to civil servants in public service and special state service positions
Borrowers and co-borrowers are also allowed to mortgage their immovable property to pay the down payment of the home the borrower is buying.
The BoM has distributed funds to Khan Bank, Trade and Development Bank, Golomt Bank, State bank, Khas Bank, Ulaanbaatar City Bank, Bogd Bank, Transport Development Bank, Credit Bank, Arig Bank, and Capitron Bank.