A Mortgage for Buying or Building a House: What You Need to Know

Two different loans: buying and building

A mortgage for a finished house is similar to one for an apartment: the house and land serve as collateral, and the bank checks the documents and orders a market valuation. The difference is in the details: with a house there are usually more questions about the plot, utilities and whether all structures are legally registered.

A construction loan is more complicated. The house does not exist yet, so the plot or the unfinished building is pledged, and the bank needs to know what the project costs and whether the money will be enough to finish it.

What banks require

Each bank sets its own terms. As a benchmark, here are the requirements of the National Mortgage Company (NMC), which refinances loans from partner banks (nmc.am, checked on 13 September 2026):

In both cases, collateral insurance and borrower life insurance for at least the loan amount are mandatory. Another NMC condition: the land-use designation must not have changed in the last 12 months. The interest rate is set by the partner bank.

How a construction loan works

For construction you will need a building permit and a cost estimate covering labor and materials. The NMC publishes a tool on its website for estimating the cost of a private house project, so it is worth reviewing the estimate requirements in advance.

Ask the bank before signing how and when the money is released — all at once or in stages — what progress reports are required, and how long you have to finish. This determines how much of your own money you will need at the start.

Income tax refund: still possible for houses

The refund of income tax up to the interest paid also covers buying a private house from a developer that is a company or sole proprietor, and building your own house (Article 160 of the Tax Code and the procedure approved by Government Decision No. 1321-N). Construction requires a valid building permit. Only salaried employees are eligible.

But the map is shrinking. For loans taken after 1 January 2025, the refund does not apply to homes in Yerevan. For loans after 1 January 2027, it ends in Aragatsotn, Ararat, Armavir and Kotayk provinces, and after 1 January 2029 in all other provinces. Border settlements on the government’s list are exempt. For loans from 2025, the refund is capped at AMD 750,000 per quarter.

Support for families with children

The government approved a housing support program for families with children for 2024–2026 (Public Radio of Armenia, 14 March 2024). It includes down payment support for families with two minor children who buy a home or build a house with a mortgage in the provinces.

For building a house, the support is 10% of the mortgage actually received, capped at AMD 1 million, plus 5% (up to AMD 500,000) for the third and each subsequent child, with an overall cap of AMD 2 million. The program runs until the end of 2026, so ask the Ministry of Labor and Social Affairs about plans for 2027.

Key points

• A loan to buy a house is similar to an apartment mortgage; a construction loan requires a cost estimate and a building permit.
• NMC terms: up to AMD 35 million, loan payments no more than 45% of income, drams and a fixed rate.
• The interest-based tax refund is possible for building or buying a house from a developer, but not in Yerevan for loans from 2025.
• Families with two or more children in the provinces can get down payment support — the program runs until the end of 2026.
• Check the land-use designation and plot documents before paying a deposit.