Financial Services, Latvia, Loan, Real Estate

International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 17:02

EUR 91.5 mln worth of new mortgage loans issued to households in Latvia in Q1

BC, Riga, 10.05.2016.Print version
New mortgage loans that Latvian banks issued to households in the first quarter of the year 2016 total EUR 91.5 million which is a 77% rise from the same period last year, the Latvian Association of Commercial Banks said, quoting figures supplied by the financial watchdog, the Finance and Capital Market Commission.

”These figures are proof positive that the government policies have direct effects on business and people’s opportunities to take loans to improve their housing,” said Martins Bicevskis, the president of the banking association, informs LETA.

 

He said that few housing loans were issued in the first quarter of 2015 but after the parliament revised the law about mandatory inclusion of the jingle mail clause in mortgage loan agreements and made the clause optional the situation with lending had improved. The government program to help families with children buy their first home also contributed to revival of lending.

 

According to the information of the Banka of Latvia, the jingle mail clause has been included in agreements for 106 housing loans issued last year or 1.2% of the total number of loans. With the jingle mail clause that allows struggling mortgage holders to mail the keys of their property to the creditors to get rid of their debt, the downpayment on the loan is higher and therefore available only to households that can afford the large downpayment.

 

Aggregate loan portfolio of Latvian banks stood at EUR 14.68 billion at the end of March this year, of which EUR 9 billion were business loans and EUR 4.4 billion were mortgage loans to Latvian households. In 2015, aggregate loan portfolio increased 0.1% for the first time since the financial and economic crisis in 2008.

 

New mortgage loans issued in Latvia in 2015 totaled EUR 321.2 million, growing 11.5% from EUR 288.2 million in 2014. Altogether 8,541 new mortgage loans were issued last year.

 






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