The Most Affordable Mortgage Loans in Armenia: Where to Find the Lowest Rates and Zero Fees?

For many families, purchasing an apartment or house is one of the most significant financial decisions in their lives. If there isn't enough money to cover the full cost upfront, a mortgage can help make this dream come true. However, it's crucial to choose a bank that offers the lowest interest rate and avoids hidden high fees—otherwise, you could end up overpaying millions of drams. The AFM team monitors Armenia’s mortgage market daily to showcase the best available offers!

In this article, you’ll learn:

1. Which banks in Armenia offer the lowest mortgage interest rates
2. Which banks charge no fees at all, and which impose a lot of extra costs
3. How much more beneficial state-supported mortgage programs can be
4. Comparison of overpayment: standard mortgage vs. mortgage with income tax refund
5. Example calculations and comparison tables to help you make an informed choice

What drives mortgage overpayment?

A mortgage is a type of loan. Any loan implies that the bank will receive more money than it initially lent to the client—in other words, the borrower always pays more in the end. The total cost of a mortgage depends not only on the interest rate but also on other key terms. Overpayment is influenced by:

1. Effective annual rate — this includes all loan-related expenses, not just the base interest.
2. Bank fees — one-time and recurring charges can significantly increase the cost.
3. Loan term — the longer the term, the more interest you’ll end up paying.
4. Repayment scheme — annuity or differentiated payments affect total overpayment.
5. Type of interest rate — in the long run, loans with variable rates carry much higher risks.

Considering all of these factors when choosing a bank can help you save millions over the lifetime of your mortgage. The AFM team monitors all these parameters carefully, and you can easily find them reflected in the product cards and choose a bank with the lowest interest rate.

Why You Should Carefully Choose the Type of Interest Rate

When choosing a mortgage, many people focus only on the number — the lower the rate, the better. But it’s equally important to understand what kind of interest rate the loan offers: fixed or variable, and for how long it is fixed. This decision can significantly impact your financial stability for years to come.

In Armenia, some banks, aiming to protect themselves from fluctuations in the key refinancing rate, offer flexible terms that allow for rate revisions after 3–5 years.

For example:

1. VTB (Armenia) may revise the interest rate every 3 years, based on the terms set by the National Mortgage Company.
2. IDBank offers programs where the interest rate is fixed for the first 5 years, after which the bank may revise it.
3. Converse Bank, in its variable-rate programs, allows rate changes twice a year, but with a cap on the maximum increase.

In practice, this means you could take out a loan today at, say, 6% per annum, and in five years be paying 9% — depending on market conditions. A difference of just 2–3% can lead to millions of drams in additional payments over the life of the loan.

Bottom line: when choosing a mortgage, don’t base your decision solely on the lowest initial interest rate. Find out how long the rate will remain fixed, whether it can change in the future, and under what conditions. If you want financial predictability, go for loans with a fixed rate for the entire term. And to avoid getting lost in the fine print, use AFM — compare all bank offers in one place and choose a mortgage with transparent conditions.

How to Reduce Mortgage Overpayment

Let’s go over the key strategies that can help reduce the total cost of your future mortgage loan:

1. Use state support programs

If you qualify for one of the government housing programs, you may significantly lower your total overpayment through interest rate subsidies, income tax refunds, or preferential rates.

However, not everyone is eligible. Participation depends on specific requirements — for example:

1. Age restrictions
2. Place of employment (public vs. private sector)
3. Purchase of property in a designated area

2. Choose a bank with no additional fees

Even if you’re not eligible for state support, you can still find a mortgage on favorable terms. We’ve compiled a list of banks where the effective interest rate remains low even without government subsidies.

Also, pay attention to fees — these are often “hidden overpayments” that add up:

1. Application processing fee — sometimes charged when submitting documents
2. Loan disbursement fee — may be expressed as a percentage of the loan amount
3. Loan servicing fee — monthly or annual charges, billed separately from the interest
4. Other related costs — property appraisal, notary and registry services, home and life insurance

Choosing a mortgage without unnecessary fees can help you save millions over time.

How to Avoid Unnecessary Expenses?

1. Compare not just interest rates, but the effective annual rate — it reflects the full cost of the loan, including all associated fees.
2. Request a full payment schedule and detailed breakdown of all fees in advance.
3. Check the terms in the official bank tariffs, not just in promotional brochures.

By choosing the right bank and ensuring the conditions are transparent, you can save up to several million drams over the entire loan term.

Important: always ask the bank to provide a full cost breakdown of the mortgage, including all commissions and mandatory charges. This will help you make an informed comparison and avoid unpleasant surprises.

Where Can You Find the Lowest Mortgage Rates Without State Support?

If we consider only commercial mortgage offers — that is, without participation in state programs — the following banks currently offer the most favorable conditions:

These rates apply under standard terms (down payment, loan term, and currency) and may not reflect individual discounts or borrower-specific conditions.

What Rates Are Available with State Support?

If you qualify for one of the government-backed mortgage programs, you can access significantly lower rates — in some cases, as low as 0%. Based on our analysis, the lowest effective annual rates (EAR) under subsidized programs are offered by:

Important: A 0% rate means that the loan interest is fully subsidized by the government as part of officially approved programs.

Banks Offering Mortgage Loans with No Fees

Here are the banks where you can apply for a mortgage with no additional fees:

1. Byblos Bank Armenia
2. Converse Bank
3. Unibank (only for the program dedicated to families from Artsakh)

These banks do not charge fees for:

1. Application review
2. Loan disbursement
3. Loan servicing
4. Other hidden charges

This is especially beneficial, as in many banks, one-time fees can amount to hundreds of thousands of drams.

Example Calculation: Mortgage for AMD 20 Million (Approx. $50,000)

Loan Terms:

1. Loan Amount: AMD 20,000,000
2. Term: 15 years (180 months)
3. Interest Rate: 6% annually
4. Fees: None

Comparison:

At a 9% interest rate, the total overpayment would be approximately AMD 16,272,000.

Difference: nearly AMD 6 million — a substantial saving just by choosing a lower rate.

State Programs That Make Mortgages Even More Affordable

Even if your mortgage already comes with a low interest rate, participating in state support programs can help you save even more. Here are 4 active government programs currently available in Armenia:

1. Program for Young Families
2. Age limit: both spouses must be under 35
3. The government subsidizes a portion of the interest rate
4. Mortgage for New Constructions + Income Tax Refund
5. Applies to buildings where construction started after 2022
6. You can reclaim up to 100% of the income tax paid on interest
7. Program for Military Families
8. Includes either interest rate subsidies or partial principal repayment
9. Program for Border Communities
10. Offers very low or zero interest rates
11. May include additional housing grants

These programs can significantly reduce your overall costs — be sure to check your eligibility and include them in your mortgage planning.

Comparison: Standard Mortgage vs. Mortgage with State Support

Scenario:

1. Loan Amount: AMD 20,000,000
2. Property Type: New construction in Yerevan
3. Term: 20 years
4. Program: Income tax refund on mortgage interest

Conclusion:

The income tax benefit can cover up to 30% of your total interest payments. This is a significant amount that could instead be used for renovation, furnishing your new home, or even saved for a future vacation.

Conclusion: How to Choose the Most Cost-Effective Mortgage in Armenia

To avoid overpaying on your mortgage and losing money on interest and fees, it's essential to approach bank selection strategically. Here are the key recommendations:

1. Compare the effective annual rate (EAR), not just the nominal rate.

EAR reflects the true cost of the loan, including all associated charges.

1. Avoid hidden fees.

Even with a seemingly attractive rate, fees can add tens or even hundreds of thousands of drams to your final cost. For example, Byblos Bank Armenia, Converse Bank, and Unibank (under a specific program) offer mortgages with zero fees.

1. Consider state support programs.

If you're eligible, you can reduce your rate to 0% (as offered by Byblos Bank Armenia and Converse Bank) or receive up to AMD 5 million in income tax refunds.

1. Compare offers on AFM.

We monitor all mortgage conditions daily and present every key detail in product cards — from interest rates to commissions.

For instance, Evocabank offers one of the lowest rates on the market — starting at 9.75%, even without state support.

Meanwhile, Byblos Bank Armenia and Converse Bank provide 0% rates and no fees, making their offers especially attractive.

Don’t rush the decision — always request a full loan cost breakdown from banks, calculate the effective rate, and explore your eligibility for state subsidies.

And to save time and money — use AFM: your virtual assistant will help you find the best mortgage options tailored to your needs. You can also find out how to buy an apartment with a mortgage in Yerevan at the lowest interest rates on our platform.

Find the most beneficial mortgage on AFM — get personalized recommendations and stop overpaying. Share this article with your friends and family to help them make smarter financial decisions too.