A lari mortgage cost 12.14% and a dollar one 8.01%. Tbilisi's gross yield sits between the two

The gap between a lari mortgage and a foreign-currency one was a little over four percentage points in February. On a loan of any size that is a large monthly difference, and it is why so many buyers reach for the dollar or euro loan. But the gap exists precisely because somebody has to carry the exchange-rate risk, and in a foreign-currency mortgage that somebody is the borrower. If your income is in lari and the loan is in dollars, a move in the rate changes your payment without anyone asking you.

Gross yields for early 2026 were put at 7.53% in Tbilisi and 7.31% in Batumi, with a national average of 7.42%, slightly below the 7.53% recorded a year earlier. Gross means before management, maintenance, insurance, tax and any vacant months. Set that against a lari mortgage at 12.14% and the rent does not service the loan; the buyer is topping up the payment out of other income and relying on capital growth to make the deal work. At 8.01% in foreign currency the two numbers are much closer, which is the arithmetic driving the choice.

The lari rate follows the National Bank's policy rate, which the bank has been holding at 8.25% while it waits for inflation to come down. At its July meeting the bank said it expected average inflation of 5.2% for 2026, falling from the second half of the year towards its 3% target over the medium term, and that it intends to keep policy tight for an extended period. In plain terms: nobody at the central bank is promising cheaper lari borrowing soon, and a buyer budgeting on the assumption of a rate cut within a year is budgeting on a hope.

It is not which rate is lower. It is which currency your income arrives in, and what happens to the payment if the lari weakens while your salary does not. A borrower earning in dollars or euros who takes a foreign-currency loan is matched and the cheaper rate is simply cheaper. A borrower earning in lari who takes the same loan has swapped four percentage points of interest for an open currency position, which is a trade that can go either way. Ask the bank for the payment under a weaker lari before you decide, not after.