ArmInfo. As of July 2026, mortgage loans accounted for 20.3% of the total loan portfolio of Armenia's banking system, amounting to approximately AMD 1.8 trillion. Growth in the first half of the year exceeded 7%, while on an annualized basis it reached nearly 16%. Daniel Azatyan, Head of the Union of Banks of Armenia (UBA), made this statement during a press conference on August 4, while presenting the results for the H1 2026.
Responding to a question from an ArmInfo correspondent, Azatyan stated that he does not consider the current dynamics a slowdown. In this regard, he noted that the highest growth rates in mortgage lending were observed in 2023-2024, driven by the income tax refund mechanism. Returning to his forecast, the head of the UBA noted that an annual growth rate of 16% is quite natural and normal. Overall, according to him, the first half of the year is traditionally less active in terms of lending. Furthermore, Armenia recently held parliamentary elections and other political processes. In the second half of the year, Azatyan assured, an intensification of lending is expected across all areas.
At the same time, he did not rule out that in the long term, certain challenges may arise in the mortgage market as borrowers pay off a larger portion of the principal loan amount over time and, consequently, receive smaller income tax refunds. However, the head of the UBA noted that over a 7–8 year horizon, this may no longer pose a serious problem for citizens, taking into account potential wage growth, inflation, and other macroeconomic factors.
According to the Financial Rating of Armenian Banks as of June 30, 2026, prepared by ArmInfo Investment Company, the volume of mortgage loans exceeded 1.8 trillion drams ($5 billion), decelerating in annual growth from 32.5% to 15.5%, while increasing by almost 8% over the past six months, with more than 5% growth in the second quarter. The share of mortgages in the total loan portfolio has declined slightly over the year, from 21% to 19%. Most banks have recorded a weakening in annual mortgage lending growth, with some even experiencing a reversal from double-digit growth to a decline.
It should be noted that the state income tax refund program for mortgage holders has been in effect in Yerevan since 2025, but it continues in the regions. Armenian authorities plan to completely abolish income tax refunds on mortgage loans starting in 2029. The abolition will be gradual. After January 1, 2027, income tax on mortgage loans in the primary market will not be refunded if the property is located in the regions adjacent to Yerevan—Aragatsotn, Ararat, Armavir, and Kotayk. Starting January 1, 2029, income tax refunds on mortgage loans will also cease to apply in the remaining regions. These restrictions will not apply to border settlements.
Recall, the state program for income tax refunds on mortgage loans for the purchase of housing in the primary market (newly built apartments or new private houses) has been in effect in Armenia since November 2014. Overall, between 2015 and 2024, AMD 209.7 billion ($529 million) was refunded from the state budget to citizens who utilized this program. In 2025, this required AMD 96.67 billion, or $253 million (consisting of the initially planned AMD 84.070 billion plus an additional allocation of AMD 12.6 billion).
