USD vs GEL Rates: What’s Better for a Mortgage in Georgia

USD or GEL for a mortgage in Georgia: which is better?

Deciding whether to take a mortgage in US dollars or in Georgian lari is one of the most important choices for buyers and investors in Georgia. The right decision depends on more than headline interest rates — it involves income currency, risk tolerance, property plans and the fine print of the loan agreement.

Why the currency matters 💬

• Exchange risk: If your income and loan are in different currencies, exchange rate swings can change your monthly payments and total cost.
• Loan conditions: Banks may offer different terms, fees and flexibility depending on currency.
• Inflation and purchasing power: Local inflation affects living costs and real repayment burden.

Key factors to assess

1. Your income and expenses

   • If you earn mostly in GEL, a lari loan reduces exchange exposure.
   • If your income is primarily in USD, a dollar loan may feel more predictable.

2. Interest rates vs. currency risk

   • A nominally lower rate in foreign currency may still be riskier if that currency strengthens versus your income currency.

3. Risk tolerance

   • Conservative borrowers often prefer the loan in the currency of their income or savings.

4. Purpose of the property

   • Rental to foreign tenants or investment income in USD can justify a dollar mortgage.
   • For living in Georgia long term, lari payments are usually more convenient.

5. Bank flexibility and clauses

   • Ask about prepayment rules, conversion options, indexation and hidden fees.

Practical decision steps ✅

1. Compare monthly payments in both currencies

   • Run scenarios with a realistic range of exchange rate movement to see possible payment changes.

2. Map your currency profile

   • What share of your income and savings is in USD vs GEL? The closer your income matches the loan currency, the lower the exchange risk.

3. Ask the bank for full examples

   • Request amortization schedules, fee breakdowns and how payments change if the exchange rate shifts.

4. Consider partial hedging

   • If you take a loan in a currency different from your income, plan how to convert part of your income or keep reserves to cover adverse moves.

5. Stress-test worst-case scenarios

   • Confirm you can afford payments if exchange rates move significantly and income remains stable or drops a bit.

Typical situations and recommendations

• Living and working in Georgia with GEL salary: a lari mortgage is often more comfortable and predictable.
• Earning in foreign currency or buying for international rental: USD may be more suitable, provided you accept exchange risk.
• Unsure about the future: seek loans with conversion options or low penalties for prepayment.

Negotiating with banks 🗣️

• Get comparative quotes for both currencies and ask for scenario calculations.
• Check for extra costs like currency conversion fees, mandatory insurances or early repayment penalties.
• Read the indexation clause carefully — it determines how the lender adjusts payments.

Common mistakes to avoid ❗

• Choosing solely on current rate differences without assessing exchange risk.
• Ignoring conversion and account maintenance fees.
• Failing to build a buffer for adverse currency moves.

Quick checklist before signing

• Align loan currency with your income or maintain a reserve in the loan currency.
• Confirm options for restructuring or switching currency if needed.
• Ensure you have an emergency fund covering several months of payments in the worst-case scenario.

If you want help comparing real offers and selecting the currency and mortgage program that fit your goals, our team can run personalized calculations. Browse available listings and start your search here: https://buyhome.ge/en/search and see apartments at https://buyhome.ge/en/apartments

We are happy to help you choose the safest, most suitable mortgage plan — contact BuyHome and we will assist with tailored advice.