Buying a home through a mortgage remains one of the most common paths to property ownership in Azerbaijan.
Thousands of families have already used this mechanism to purchase apartments – or at least ensure that their children will one day inherit them.
Yet questions have recently emerged among potential buyers: is mortgage financing now available only for new buildings? Many worry that older apartments, whose operational lifespan is nearing an end, no longer qualify.
State vs. commercial mortgages
Economist Khalid Karimli explained to Bizim.Media that both new and old buildings can be purchased through a mortgage – but the terms differ depending on the loan type and its conditions.
“According to the rules, mortgages can be issued for buildings constructed since 1970. Anything older has technically exceeded its service life,” Karimli said.
He noted that Azerbaijan offers two main types of mortgages: state-backed and commercial.
“State mortgages come with favorable interest rates and longer repayment periods. Commercial mortgages, by contrast, are issued by banks at market rates using their own funds,” the expert explained.
Why new projects are easier to finance
Karimli stressed that a property ownership certificate – known locally as a çıxarış – is mandatory for state mortgages. Without it, the loan cannot be approved.
“For commercial loans, however, an ownership certificate isn’t always required,” he said. “If the apartment is being sold by a housing cooperative or a construction company, the financing terms can be agreed directly with them. Some banks even approve loans for projects still under construction — literally at the foundation stage.”
This practice, while offering flexibility to buyers, also reflects a broader structural issue: developers and commercial lenders often dominate the housing market, while older buildings – especially those built before the 1970s – are gradually being excluded from the mortgage system.
A growing gap between old and new
The result, experts warn, is a two-tier property market. Buyers of new apartments enjoy easier access to credit, while owners of older homes face hurdles if they want to sell or renovate.
The trend also reinforces urban inequality – especially in cities where Soviet-era housing still makes up much of the housing stock.
Analysts say that unless the mortgage system adapts to include aging properties with structural upgrades, the gap between “new” and “old” housing will continue to widen – both financially and socially.
