Preferential mortgage 2026: who gets 4%, the conditions, and how to apply

When people talk about mortgages in Azerbaijan, most confuse three different things: the preferential state mortgage, the ordinary state mortgage, and a bank's own internal loan. The rates (4%, 8%, or 15%?), who qualifies for what, and the idea of a "queue" all tend to stay murky. This guide separates the three in plain language.

At the end, Mənzil.ai has two free tools: an eligibility check (which mortgage track you land on) and a mortgage calculator (monthly payment and optimal term).

Three different "state mortgages"

You have to separate these first, because all three are called "state mortgage" but the conditions are completely different:

	Fund mortgage (preferential / ordinary)	MİDA preferential housing	Bank internal loan
What you buy	Any apartment on the market (built after 1970)	New state-built housing (Hövsan, Günəşli, etc.)	Any apartment
Rate	Ordinary 8% / Preferential 4%	Preferential 4% (via PAŞA Bank)	roughly 10-16%
Queue	Annual limit - a rush of applications when it opens	Register, then select a unit in a specific building	No queue

"State mortgage at 8%" means the Fund's ordinary mortgage, while "4% preferential" means either the Fund's preferential mortgage or MİDA. Both 4% pools come from the same source - the Mortgage and Credit Guarantee Fund.

Who can get the 4% preferential mortgage?

The preferential mortgage isn't for everyone - only for specific categories. They split into two groups.

Standalone categories (no young-family requirement):

• Doctors of Science (3.2.2)
• State employees with 15+ years of service (including special state service) (3.2.3)
• Military personnel with 3+ years of service (3.2.4)
• Internal-affairs officers with a special rank and 3+ years (3.2.5)
• Judges with 3+ years on the bench (3.2.5-1)
• Scientific workers with 3+ years in a scientific position (3.2.6)
• State general-education school teachers with 15+ years (3.2.7)
• Journalists with 15+ years, listed in the Media Registry (3.2.8)
• A martyr's family member, Patriotic War and National Heroes and their family members (3.2.9)

Young-family categories (3.2.1) (both spouses must be under 35): children of martyrs, children of heroes, internally displaced persons, state employees with 3+ years, state-school teachers with 5+ years, PhD holders, people with special merit in sport, journalists with 5+ years.

Source: the number next to each category links to the matching clause of the preferential-mortgage Rules (e-qanun.az). For current rates and limits: Mortgage and Credit Guarantee Fund. Conditions can change from year to year, so check the official source before applying.

Even if you don't fit any of these categories, the ordinary state mortgage (8%) is open to any citizen.

Check your eligibility in a few seconds

Preferential conditions and the hidden details

The numbers, and the fine print most people miss:

Condition	Preferential	Ordinary
Annual rate (unguaranteed)	4%	8%
Annual rate (guaranteed)	3.7%	7%
Maximum amount	100,000 ₼	150,000 ₼
Maximum term	30 years	25 years
Minimum down payment	10%	15%

Guaranteed or not? When the Fund guarantees part of the loan (usually when your down payment is small, i.e. a higher loan-to-value), the rate drops by 0.3 points: 3.7% instead of 4% on the preferential and 7% instead of 8% on the ordinary. In exchange you pay a small guarantee fee. The unguaranteed option is the standard one: higher down payment, no guarantee fee.

The "hidden" details worth knowing:

• Once only. A family or person can use the preferential mortgage only once in a lifetime.
• The 70% rule. The monthly payment can't exceed 70% of your average monthly income over the last 12 months. So short job tenure or an unofficial salary can sink the application.
• No minimum-wage floor. Interestingly, there's no official minimum-income requirement - it's about affordability.
• The property must be built after 1970 and have registered ownership at the time of application. That rules out a lot of old or undocumented housing.
• Insurance is mandatory. The borrower's life and the property must be insured - an extra cost that's often forgotten.
• Up to 3 co-borrowers. If your income falls short, adding a spouse or another family member as a co-borrower is the legal way to clear the 70% rule.
• The annual limit. The Fund allocates a fixed budget to banks each year; when it runs out, new applications wait for the next allocation. That's the real reason behind the "queue" feeling.

Extra (one-time) costs when arranging the mortgage

Besides interest, a few one-time costs arise when the contract is signed:

• Notary (state duty): for the preferential mortgage, 60 ₼ in Baku and 25 ₼ in other cities and regions (for the ordinary one, 150 ₼ and 50 ₼ respectively).
• Registration: ownership extract 50 ₼, state registration of the mortgage 30 ₼.
• Mandatory insurance: the borrower's life and loss-of-capacity insurance is 0.26-2% of the loan, property insurance 0.2-0.22%.
• Appraisal: roughly 170-260 ₼ for an apartment (depending on building type and area).

Source: Mortgage and Credit Guarantee Fund, Mortgage-related costs (PDF).

Preferential state mortgage vs a bank's internal loan

Not everyone falls into a preferential category. Then the choice is between the ordinary state mortgage and a bank's own internal loan:

	State (preferential / ordinary)	Bank internal loan
Rate	4% / 8%	roughly 10-16%
Who	By category (preferential) / everyone (ordinary)	Anyone who passes the bank's check
Speed	Slower - e-gov, limit, queue	Fast - the bank decides itself
Property	Only post-1970, documented	More flexible (new builds, primary market)
Down payment	10-15%	often 20-30%+

The key difference is simple: a state mortgage is cheaper money, but you have to wait and qualify; a bank's internal loan is expensive money, but it's fast and open to everyone. You can see exactly how many thousands the rate gap costs, with your own numbers, in the mortgage calculator - how the total interest grows as the term lengthens becomes obvious right away.

How to apply with ASAN İmza

For the Fund mortgage, the application is fully electronic, and the same steps cover both the preferential (4%) and the ordinary (8%) state mortgage (you pick the loan type at step 7):

1. Get an ASAN İmza (or SİMA İmza / SİMA Token) - via Azercell, Bakcell or Nar at ASAN xidmət centers.
2. Log into the e-gov.az portal, open the "Electronic mortgage and credit guarantee" system.
3. Sign the consent form - it authorizes the automatic retrieval of your data from 6 state institutions.
4. Your electronic cabinet fills automatically from state databases; you verify and complete it.
5. Fill in the income and expenses section (salary, business income, dependents, existing loans).
6. Add co-borrowers if your income falls short (each confirms with their own signature and a one-time code).
7. Preliminary assessment - you choose the loan type (ordinary/preferential), bank, amount, term and down payment, and receive preliminary terms.
8. Property and appraisal - after the bank's approval you pick the apartment, request an appraiser, and notarize the contract at ASAN.

For new state-built housing (MİDA) the process is a little different: you register in the "Preferential housing" system, a sales announcement comes out for a specific building, and the unit is allocated on a first-come-first-served basis - your registration date gives no priority in the queue.

The annual limit opens on a set date and can run out quickly, so it's important to set up your electronic account in advance.

Are you eligible? Check it yourself

Enter your category, the property price and your income - and see which mortgage track you land on (4% preferential or 8% ordinary), whether the payment fits your budget, and what's left to fix.

Check your preferential mortgage eligibility

Source and note

The conditions and figures are based on the official materials of the Mortgage and Credit Guarantee Fund (mcgf.gov.az) and on the full text of the Rules for issuing mortgage credit from the funds of "Azerbaijan Mortgage Fund" OJSC (eligibility categories are in section 3.2 of the Rules).

The information here is general in nature and is not legal or financial advice. Rates, limits and application dates change from year to year; the final decision rests with the bank and the Fund. For your specific case, contact the bank or the Fund.