A New Outlook on Mortgage Lending in Georgia

During the first five months of 2025, Georgia’s mortgage lending landscape has undergone notable shifts. According to the latest data from the National Bank of Georgia, a total of 19,313 new mortgage loans were issued between January and May, amounting to 1.65 billion GEL. While the total value of loans remained steady year-over-year, the number of new loans dropped by 15% compared to the same period last year.

This decline in volume paired with a stable total value highlights a key development: the average size of a single mortgage loan has grown significantly. In 2024, the average mortgage stood at 72,000 GEL, whereas in 2025 it has risen to 86,000 GEL. This suggests that while fewer people are qualifying for mortgages, those who do are securing larger loans. In practice, the market is increasingly dominated by borrowers with stronger financial profiles, while lower-income households are finding it even harder to afford homeownership.

In response to the slowdown in mortgage lending, the National Bank has adjusted its regulations. In February 2025, the Financial Stability Committee reduced the required down payment for homebuyers. Previously, borrowers needed to finance at least 15% of the property’s value from their own savings; now, the threshold has been lowered to 10%. While this change improves access for some buyers struggling to accumulate sufficient savings, it also raises concerns about higher debt burdens and the long-term financial stability of borrowers.

Another critical factor shaping the market is the rising cost of mortgages. As of May 2025, the average annual interest rate on mortgage loans issued in GEL has reached 13.10%—an increase of 1.46 percentage points compared to the same period last year. This rise reflects a tightening of the central bank’s monetary policy and the broader increase in the cost of borrowing money. As a result, homeownership has become even more expensive for those reliant on credit.

These trends point to a complex and challenging environment for Georgia’s mortgage market. Demand for housing continues to rise, yet financial accessibility is deteriorating. Regulatory policies are being loosened to ease entry, but interest rates are climbing. Most critically, the very social groups most in need of housing support—middle- and low-income families—are also the most financially strained.

Going forward, the key question will be whether real estate remains attainable for the broader population or becomes increasingly skewed toward high-income earners. The balance between promoting access and ensuring stability will define the next phase of Georgia’s mortgage market.