The FINANCIAL — If you need financing for home appliances, renovations, construction or simply to create a better living environment, Bank Republic Societe General Group, a member and subsidiary of the international Societe Generale Group, is now offering two types of loans – the Flexible Mortgage loan and My Place.
The interest rate for the first product is updated every six months based on the performance of the London Interbank Offered Rates (LIBOR) index.
The average interest rate of Georgian commercial banks issued GEL 1.5 billion in mortgage loans in October 2012.
“Historically, the New Year period is always very active in terms of customer spending,” said Giorgi Samadashvili, Head of the Bank Products Development Department at Bank Republic Societe General Group. “Subsequently, demand for retail loans increases in this period as well. Since October we have been promoting our consumer loans with the unprecedentedly low interest rate of 13.95%. This campaign proved to be extremely popular with customers, so we decided to follow it up with another interesting offer, this time for mortgage loans. Especially since the sales of real estate tend to rise prior to New Year as well,” he added.
“The starting interest rate of the Flexible Mortgage loan is discounted by approximately 1% to 1.5% compared to My Place. For example, if a customer is eligible to receive a standard mortgage loan at 12%, they will be able to receive a Flexible Mortgage with an interest rate of 10.5% to 11%. The rate of the loan is updated every 6 months based on the performance of the LIBOR index. The customer is able to convert a Flexible Mortgage to fixed interest rate at any stage during the loan’s duration. Therefore risk associated with the hypothetical increase of LIBOR is fully covered. The minimum required income of borrowers is set at USD 1,800, with a minimum loan amount of USD 50,000,” he added.
The terms for the My Place Loan are as follows: Currency – GEL, USD, EUR; Amount – from USD 2,000 – unlimited; Term – up to 15 years; Annual Interest Rate – from 11%; Approval fee – 1%; Service fee – 0%; Insurance interest rate – from 0.5%.
Here are the terms for the Flexible Mortgage loans: Currency – USD; Amount – from USD 50,000 – unlimited; Term – up to 15 years; Minimum income – GEL 3,000 or equivalent in a foreign currency; Insurance rate – 0.5%; Approval fee – 1.5%; Service fee – 0%.
“In terms of preference, we recommend that customers finance the purchase of real estate with our Flexible Mortgage, if the customer satisfies the income requirement, especially since the rate variation risk is minimized through the option of switching to a fixed interest rate. However, the terms and conditions of My Place are also very competitive on the market; therefore, both of these products are a good choice for our customers,” he added.
“Since the Flexible Mortgage is an innovation on the local market, we will be closely monitoring the product’s adoption by our customers. Based on their feedback, we will continue to offer new solutions to serve their banking needs. Bank Republic Societe General Group is the only bank on the Georgian market that provides this kind of mortgage loan,” he added.
The interest rate of the Flexible Mortgage Loan changes every six months and then remains unchanged for the next six months. Information on the new interest rate will be provided at Bank Republic Societe General Group branches.
“Similar campaigns may be offered next year as well, depending on the needs of the market,” said the Bank.
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