How to compare banks and choose a mortgage rate

Ask each bank for a total-cost-of-credit calculation and a full payment schedule on the same loan amount and term. Add all the payments over the entire term and subtract the principal. That is your real overpayment. Only this way can you compare banks honestly — advertised rates will not do.

Origination fee, account-opening fee, valuation fee — one-off costs that raise the real cost of the loan. Convert them into an 'effective rate premium': divide the sum of all one-off fees by the loan amount and add it to the annual rate.

By law you are entitled to choose the insurer yourself, not take the one the bank offers. Insurers affiliated with the bank are usually 20–50% more expensive than the market. Get a quote from 2–3 independent insurers before signing — that is a legal right and a real saving.

The Uzbek government subsidises mortgages for certain categories: young families, primary purchases, public-sector employees. The rates under such programmes can be half of the market level. Check on the website of the Central Bank of Uzbekistan (cbu.uz) or the state housing-savings programmes — it takes 20 minutes and can save years of payments.

Large developers often arrange a reduced rate with a partner bank for their projects. Important: check whether the flat's price has been padded 'against the rate' and whether there are hidden conditions. Compare the price of the same developer's flat for an all-cash purchase.

If rates have fallen since your original loan by 1.5–2% or more, refinancing can be worthwhile. Run the maths: savings on the monthly payment multiplied by the remaining term, minus the cost of refinancing. If the number is positive, refinance.

A good flat in Tashkent's competitive market can go in a few days. Banks that give a pre-approval in 1–2 days offer a real advantage. Ask each bank how long it takes from document submission to signing the loan contract.

The standard pack: income confirmation (employer's certificate or tax return), employment history for 6–12 months, documents on the property being purchased. Before applying, request your credit history — sometimes it contains errors that can be corrected.

Many people are afraid to apply at several banks, fearing that it will 'damage' their credit rating. In most countries in the region multiple mortgage applications within 30–45 days count as a single 'enquiry' at the credit bureau. Do not limit yourself to one bank.

Other things being equal, choosing a top-5 bank by assets or one with state participation reduces the risk of problems with servicing your loan. On a 15-year loan, the bank's reliability matters.

Your deposits at the bank are protected by the deposit-insurance system — check the limit. If you hold both a deposit and a loan at the same bank, make sure the deposit does not exceed the insured limit.