CBA: Rising rates reduce mortgage affordability for population

Rising housing prices and an increase in average interest rates on new mortgage loans in 2024 have lowered the mortgage affordability index in Azerbaijan, according to the document on financial stability published by the Central Bank of Azerbaijan (CBA).

According to Report, the positive trend in population income is helping to keep the affordability index above the critical level, which supports the stability of mortgage lending, according to Report.

"The affordability index is calculated as the ratio of per capita disposable income to the average monthly payment on new mortgage loans. A value above 100% indicates that household income is sufficient to cover mortgage payments, while a value below 100% means that the monthly payment exceeds disposable income," the document explains.