29 May 2025

What is a mortgage loan?

In recent years, the housing issue has become one of the most pressing problems for the population of Uzbekistan. Despite the implementation of many programs by the state, the majority of the population uses mortgage loans to acquire housing. However, not every citizen fully understands the essence of a mortgage loan, the conditions under which it is issued, what risks and benefits it has. In this article, we will provide comprehensive information about the basic concepts, types, procedure for obtaining a mortgage loan, and the most common mistakes.

Mortgage is a type of long-term loan that is issued against real estate collateral. This means that you borrow money from a bank to buy a house or apartment, but the real estate itself is used as collateral. Mortgage loans are usually issued for a long term - from 10 to 25 years.

The main types of mortgage loans:

• Annuity loans - the same amount is paid every month. In the early years, the interest is higher, and then the principal debt decreases.
• Differential loans - monthly payments decrease. The principal debt is divided into equal parts, and interest is calculated based on the remaining debt.
• State-subsidized mortgages - for young people, low-income families, interest rates are partially or fully covered by the state.
• Commercial mortgages - based on market rates, issued by private banks.