Let us remind you that last year the authorities of the Republic of Latvia adopted amendments to the law on the protection of consumer rights. According to the amendments, mortgage borrowers have the right to compensation of 30% of interest payments, but not more than two percentage points of the interest rate for a given period. The loan must have a balance of up to €250,000 in 2024.
They decided to help the debtors, as they were tormented by the constant increase in interest rates on loans. To provide this support, credit institutions are required to pay a special fee “in order to protect public welfare, taking into account the burden of payments on households.”
Banks, as duty payers, are also required to calculate, for each qualifying mortgage borrower, compensation in the amount of 30% of the quarterly interest payments on the relevant mortgage agreement, up to two percentage points of the interest rate for the period (the overall rate). However, no interest compensation is paid on fixed-rate mortgages.
The duty will be administered by the State Revenue Service (SRS). Credit institutions will have to provide the SRS with the payment account number of the mortgage borrower, to which the SRS will transfer interest compensation.
And now the first payments have already been made. According to tax authorities, 842 payments have already been made for a total amount of 179,726.37 euros.
Payments are made according to lists submitted by credit institutions before April 10. Compensations will be paid gradually until April 30.
This year, mortgage recipients will receive money into their accounts four times – in April, July, October and January.
As the SRS explained, the process is automated, and people entitled to compensation do not need to do anything themselves, so the SRS especially urges people to beware of scammers who try to lure out personal data and funds by posing as the SRS or a credit institution.
The SRS will not ask people to “follow the link”, “confirm your identity”, “scan the QR code and use a temporary password”, “send your account number”, “name the password” and so on, as scammers suggest doing.
Who takes loans
The average loan amount issued for the purchase of real estate last year was just under 79 thousand euros.
Of all mortgage loans issued, approximately a fifth were granted for the purchase of private houses, and just under 80% for the purchase of apartments.
The average loan repayment period in most cases is 21 years.
In the category of standard-type apartments in Riga, the greatest demand was for apartments in “Lithuanian projects”, houses of the 602nd series and “Khrushchev” buildings. Fewer transactions, but at higher prices, were concluded with apartments of the 119th and 104th series.
In 2023, housing loans were most often issued to people aged 35–45 with a university degree, a spouse or partner, and an after-tax income above €1,200.
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2024-04-16 18:53:35