By The FINANCIAL

Copyright finchannel

Georgia is among the countries with the highest mortgage interest rates, according to data collected by GlobalPropertyGuide.

Compared to global benchmarks, Georgia’s rates are elevated—higher than in advanced economies (e.g., U.S. ~6.4%, Eurozone ~3-4%) but lower than regional peers like Turkey (~44%) or Russia (20-25%). Within emerging markets, it’s on the higher end, similar to Egypt (18-22%).

Trends in Mortgage Rates

Recent Movements: Rates have shown a slight downward trend in 2025, declining from 13.15% in prior periods to 13.12% by June. This follows a broader stabilization after peaks in 2022-2023 driven by post-pandemic inflation and the Russia-Ukraine conflict’s spillover effects. The NBG’s policy rate has remained steady at 8% throughout much of 2025, signaling controlled inflation (hovering near the 3% target).
Historical Context: From 2008-2025, the policy rate averaged 7.25%, with highs of 12% in 2008 amid global financial crisis impacts. Mortgage rates have followed suit, trending downward from double-digit highs in the early 2010s as banking reforms improved. However, 2025 projections suggest rates will stay around 8-13% by year-end, barring major shocks.
Linked to Housing Market: Residential property prices surged 11.53% year-over-year in Q1 2025, boosting demand for mortgages despite high rates. This price growth is fueled by tourism recovery, remittances, and foreign investment, potentially pressuring rates upward if demand outpaces supply.

High rates are common in emerging markets with double-digit inflation or currency instability. For instance, Turkey’s rate of 44% is the global outlier, far exceeding even other high-inflation nations, as banks price in massive risk premiums. In contrast, advanced economies like the US (~6.5-7% for 30-year fixed), Eurozone (~3-4%), and Japan (~1-2%) have much lower rates due to stable policies and recent easing.

Trends in 2025: Global mortgage rates peaked in 2023-2024 but have declined in many places as inflation eases (e.g., from 20%+ to under 10% in some Latin American countries). However, no major cuts are expected in high-rate nations like Turkey or Russia without resolved inflation.

Caveats: In hyperinflation cases (e.g., Argentina, Venezuela), nominal rates are sky-high, but “real” rates (adjusted for inflation) can be low or negative, making borrowing somewhat viable for those with appreciating assets. Data for sanctioned or unstable economies (e.g., Venezuela) is often estimated from lending benchmarks. For the most current rates, check central bank websites or tools like Trading Economics.
Source: National Bank of Georgia

Fixed vs. Variable Rates: Mortgage rates can be fixed for a set term or the entire loan duration, offering predictable repayments. Alternatively, variable rates fluctuate over time, influenced by changes in market benchmarks such as EIBOR (Emirates Interbank Offered Rate), EURIBOR (Euro Interbank Offered Rate), or similar regional indices in Asia.

Hyperinflation Effects: In countries experiencing hyperinflation, mortgage rates may appear exceptionally high. However, these rates often reflect the lender’s response to rapid currency devaluation and increased lending risks, rather than true borrowing costs when adjusted for inflation.

Currency Fluctuations: For international borrowers, exchange rate volatility can significantly impact the cost of repaying foreign-currency-denominated mortgages. A strengthening or weakening local currency relative to the loan currency can increase or reduce the effective repayment burden.

Loan-to-Value (LTV) Ratios: Mortgage rates are often linked to the LTV ratio, with lower rates offered for loans with higher down payments. Borrowers with high LTV ratios might face higher rates due to increased lending risk.

Regional Benchmarks: Across Asia and other regions, mortgage rates are frequently tied to interbank lending benchmarks, such as SIBOR (Singapore Interbank Offered Rate) or THBFIX (Thailand Baht Interest Rate Fixing), which fluctuate with monetary policy and market liquidity.