Buying an Apartment with a Mortgage in Yerevan: Which Banks Offer the Lowest Rates

Yerevan remains the most expensive city in Armenia in terms of real estate prices. Starting from 2025, the income tax refund program for mortgage borrowers is no longer available in the capital. This makes it especially important to choose a bank that offers a low interest rate and minimal extra costs — key factors for anyone looking to buy an apartment in Yerevan and avoid excessive overpayments.

This article explains where to find low-interest mortgages, compares loan terms under government programs and standard offers, provides practical examples, and outlines additional costs to consider.

How to Choose a Mortgage with Truly Low Overpayment

A low interest rate is important — but it’s not the only factor that makes a mortgage affordable. Banks often advertise attractive rates while hiding fees or limitations in the fine print. Here's what you should pay attention to:

What Drives the Final Overpayment on a Mortgage?

1. Effective interest rate, not just the nominal one.
2. This includes commissions, insurance, and other charges — giving you the true cost of borrowing.
3. Loan term.
4. The longer the term, the higher the total overpayment — even at a low rate (unless you plan to repay early).
5. Down payment size.
6. A larger upfront payment means a smaller loan amount and less interest overall.
7. Payment type: annuity or differentiated.
8. With annuity payments, you mostly pay interest in the early years. With differentiated payments, the principal is repaid faster and overpayment is lower.

Key Factors to Consider When Choosing a Mortgage in Yerevan

1. Extra fees — such as application processing or account maintenance.
2. Even with a low interest rate, these fees can significantly increase the total cost.
3. Insurance requirements.
4. Whether it’s mandatory or optional — and how much it adds to the overall cost.
5. Flexible terms — including early repayment without penalties, online applications, or joint applications with a spouse.
6. Government support programs.
7. These can significantly reduce your interest rate or offer partial cost reimbursement.

Top 5 Tips for Getting a Mortgage in Yerevan Without Overpaying

1. Compare total overpayment, not just interest rates

Don’t rely on the advertised “minimum” rate — focus on the maximum effective rate, which reflects the full cost of the loan.

1. Consider government support programs — if you’re eligible

Families displaced from Nagorno-Karabakh, young families, and participants of energy-efficiency initiatives can access mortgages at 0.5%–6%, which is significantly lower than standard market rates.

1. Review all bank fees

Make sure the bank doesn’t charge hidden fees for loan issuance, account maintenance, fund transfers, or early repayment.

1. Request a payment schedule in advance

Ask for both annuity and differentiated payment schedules, then calculate the total overpayment for each to compare.

1. Don’t hesitate to negotiate with the bank

You might get a better rate if your salary is paid into the same bank or if you apply with a guarantor. Always ask about personalized terms.

1. Explore developer-offered programs

Yerevan has a booming construction sector. Developers often compete by offering discounts and installment plans, which can make buying a new home more affordable.

Which Banks Offer the Lowest Mortgage Rates in Armenian Drams in Yerevan?

The table below lists current offers available in 2025, sorted by maximum effective rate in AMD. All listed programs are denominated in Armenian drams, which is the most convenient option for local residents. Loans in USD and EUR are not included.

Note: All listed programs are offered in AMD, which is especially convenient for residents of Armenia. Programs in foreign currencies such as USD or EUR are not included in this comparison.

How Government Programs Reduce Mortgage Rates

Government subsidies are a real way to reduce your interest rate and monthly payments. Here are the main types of support available:

1. Program for Families from Nagorno-Karabakh — interest rate starting from 0.5% annually
2. Energy-Efficient Renovation — up to 6%, still lower than standard market rates
3. Border Region Housing — from 0.15%, available when buying property in designated regions

How to Lower Your Mortgage Rate Without a Government Program

Even if you're not eligible for state support, there are ways to reduce your mortgage rate through personal conditions:

1. Salary project with the bank

If your salary is deposited to the same bank where you apply for the mortgage, your rate may drop by 0.5–1 percentage points.

1. Higher down payment than required

The more you pay upfront (e.g., 30% instead of the minimum 10%), the lower the bank’s risk — and potentially the lower your rate.

1. Co-borrowers or guarantors

Applying jointly with a spouse or parents can improve your loan terms.

1. Positive credit history

If you've had previous loans with no missed payments, the bank is more likely to offer you a reduced rate.

1. Voluntary life insurance

Some banks offer interest rate discounts when you opt for comprehensive life and property insurance.

Tip: Always ask the bank which of these factors can reduce your rate — they might serve as a hidden advantage during negotiations.

Comparison: Standard Mortgage vs. Government-Supported Mortgage

Even if you apply personal strategies to reduce your rate, government programs remain the most cost-effective. Let’s compare the two:

How Government Programs Reduce Mortgage Rates

Government subsidies are a real way to reduce your interest rate and monthly payments. Here are the main types of support available:

1. Program for Families from Nagorno-Karabakh — interest rate starting from 0.5% annually
2. Energy-Efficient Renovation — up to 6%, still lower than standard market rates
3. Border Region Housing — from 0.15%, available when buying property in designated regions

Mortgage Payment Example: How Much a Family Will Pay for an Apartment in Yerevan

Let’s look at a typical case: a family plans to buy an apartment in Yerevan for AMD 30 million.

1. They have savings for a 20% down payment — that’s AMD 6 million
2. The remaining AMD 24 million they plan to borrow via a mortgage for 20 years (240 months)
3. 
   

Now let’s compare two scenarios: with and without a government support program.

Option 1: Without Government Support

1. Interest rate: 12% annually (annuity payments)
2. Monthly payment: ≈ AMD 264,000
3. Total repayment over 20 years: ≈ AMD 63.3 million
4. Total interest overpayment: ≈ AMD 39.3 million

Option 2: With Government Support

1. Interest rate: 5% annually (e.g. under energy-efficiency or family support programs)
2. Monthly payment: ≈ AMD 158,000
3. Total repayment over 20 years: ≈ AMD 37.9 million
4. Total interest overpayment: ≈ AMD 13.9 million

Comparison Table

Over AMD 25 million saved — that’s practically the cost of a second apartment in the suburbs, a new car, or even a full university education for a child.

How the Mortgage Income Tax Refund Program Works in Armenia

Armenia has an income tax refund program for mortgage borrowers. It allows you to recover part of the interest paid on your loan through a refund of the income tax you've already paid — in other words, the government returns the money you paid as tax on your salary.

What Changed in 2025 in Armenia’s Mortgage Income Tax Refund Program?

Previously, buyers of new apartments in Yerevan could apply for an income tax refund, which partially compensated for the interest paid on a mortgage. However, as of January 1, 2025, the program is no longer available in the capital.

Now, you can benefit from the income tax refund only when:

1. Buying property outside of Yerevan
2. Participating in one of the approved government programs

Key Updates to the Program

1. Since 2025: The maximum quarterly refund is limited to AMD 750,000
2. From 2027: The program will no longer be available in Ararat, Armavir, Aragatsotn, and Kotayk regions
3. From 2029: It will apply only to border communities officially approved by the government

Exception: Construction Permits Issued Before 2022

There’s an important exception:

If you're buying an apartment in a residential complex in Yerevan whose construction permit was issued before January 1, 2022, you still qualify for the tax refund.

When choosing new construction, always ask the developer for the permit date — it could save you hundreds of thousands of AMD per year.

To be sure about your eligibility, consult your bank and developer — they are required to provide official information.

Example

If your monthly salary is AMD 500,000 and your income tax rate is 23%, the government can refund around AMD 115,000 per month — that’s nearly half the monthly mortgage payment under a government-supported program.

Can Non-Residents Get a Mortgage in Yerevan?

Most banks in Armenia do not issue mortgages to non-residents. However, there are some exceptions on a case-by-case basis.

Non-residents should be prepared for:

1. A higher down payment
2. Stricter income verification

Details vary by bank, so it’s important to consult directly with the institution.

FAQ: Common Questions About Mortgages in Yerevan

Q: What documents are required to apply for a mortgage in Yerevan?

A:

1. Passport
2. Proof of income
3. Employment contract
4. Copy of the property (if already selected)
5. Same documents for a co-borrower (if applicable)

Q: What is the income tax refund program for mortgages?

A: It’s a government program that allows you to recover a portion of the interest paid on your mortgage by refunding the income tax you’ve already paid. As of 2025, the program is still active, but only for primary market properties and if you're participating in an eligible government program.

Q: Is the tax refund still available for mortgages in Yerevan?

A: As of 2025, the income tax refund does not apply to mortgages for apartments or houses in Yerevan.

Exception: If you're buying a unit in a new development with a construction permit issued before January 1, 2022, the tax refund remains available.

Q: Can I apply for a mortgage online?

A: Yes. Most banks now allow you to submit a preliminary application online through their websites.

You can also apply online via the AFM platform to compare offers from different banks.

Conclusion

In 2025, the key strategy isn’t just finding a low interest rate — it’s choosing a smart mortgage with minimal total overpayment.

We compared offers from leading banks — Unibank, Armeconombank, and Ameriabank. The lowest effective rates start at 0.15% (through government programs), while standard market offers can reach up to 12% annually.

What really matters is the effective interest rate, not the nominal one — it reflects the true cost of borrowing. Total mortgage cost is also affected by fees, loan term, payment type, and insurance. Even with a low nominal rate, your overpayment could be high if you ignore these factors.

Let’s recap with a real example:

1. Apartment price: AMD 30 million
2. Without government support: monthly payment ≈ AMD 264,000
3. With government support: monthly payment ≈ AMD 158,000
4. Total savings over 20 years: over AMD 25 million

If you’re not eligible for a state program, you can still reduce your rate by:

1. Increasing your down payment
2. Enrolling in a salary project
3. Adding a co-borrower or guarantor
4. Getting voluntary insurance

In 2025, the income tax refund is available only in the regions, and only if you're part of a government program. In Yerevan, it’s only allowed for properties with a construction permit issued before January 1, 2022.

Pro tip: Don’t just look for the lowest rate — look for a smart mortgage that factors in all costs. This strategy won’t just save you a few percent — it could save millions of drams and offer peace of mind for years to come.

Use AFM to find the best mortgage — get personalized recommendations and avoid unnecessary overpayments.