Procedures for issuing housing loans with an 8 percent interest rate, a program implemented by the Mongolian government, are being changed.

We learned more about it from an official source at the Mortgage Corporation of Mongolia. The source stated, “The Mongolian government and Bank of Mongolia have made changes to the loan procedure. In particular, if the apartment which is going to be purchased through the loan with an 8 percent interest rate is new, 1 meter shall be priced at 2.2 million MNT, if old, the price will be no more than 1.9 million MNT. Banks are providing the loan according to this rule."

By establishing the new constraints on prices, banks will be protected from unsecure loans and if a borrower does not make loan payments, the apartment's value will comply with market rates.    

After the launching of the program to provide loans with 8 percent interest, the price of apartments increased by 20 to 30 percent, and officials note that it will influence regulations on prices for apartments.