Citadele Bank

Extensive Interest Confirms Need for Availability of Mortgage Loans in Latvia

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During the past three weeks, the Citadele Bank has received more than 1,800 requests for consultations on the issue of whether Latvian state-guaranteed loans with easier down payment terms can be received. “This shows that there is a need for available mortgage loans in Latvia,” says the director of the Citadele Retail Lending Division, Baiba Tētiņa.

110 families have already submitted documents to receive a loan.

“Citadele employees who have offered consultations to local residents have found that the purchase of a home is important for many families in Latvia, and most often families that visit the bank have not identified a specific property,” says Tētiņa. Given that the amount of financing for the state guarantee programme is limited, families are applying for consultations and looking for a home simultaneously. The responsible decision on purchasing a home is carefully considered, first engaging in consultations, considering the family’s financial capabilities, and learning about the terms of the Citadele housing support programme. Accordingly, most families are looking for an appropriate home, consulting with the bank, and preparing documents to get a mortgage loan all at once.”

48% of families that have submitted documents for a mortgage loan have one child, 38% have two children, and 13% have three or more. 31% of parents who want to receive a state-guaranteed mortgage loan are 30 or younger, 6% are above 40, while 63% are between 31 and 40.

The issue of buying a home is also of interest to future parents. “Most of the families that we have met during the three weeks of this programme have one child, while the largest family has six,” says Tētiņa. “We have also seen interest among future parents and families without children, and that, too, confirms the need for accessible mortgage loans.”

Tētiņa says that if the law were amended to allow families to choose a mortgage loan with or without the “leave the keys behind” principle, the ability of families with children to buy a home as part of the support programme would be even greater, because that would reduce the necessary down payment even further.

Most families want to take out a loan of up to EUR 40,000. 78% of the applications received by Citadele so far apply to homes in Rīga, with 62% of applicants seeking a loan of up to EUR 40,000, and 38% of applications seeking a loan above that sum.

“The consultations show that families need homes mostly so that they do not have to live in a home with three generations or rent a flat,” says Tētiņa. “Most families are prepared to take on loan obligations to purchase a two or three-room flat. Some families outside of the capital city wish to purchase a private home. Parents think not just about the most appropriate size of the home and the loan payments, as well as anticipated monthly costs for home maintenance. People can choose the best option by balancing their needs and their abilities.”

As has been reported in the past, Citadele is the only bank in Latvia to offer state-guaranteed mortgage loans to families with children. The bank signed an agreement with the Latvian developmental financing institution ALTUM for this reason. Families with children can receive mortgage loans from Citadele with easier down payment terms and financing up to 95% of the value of the home. The down payment depends on the number of families with children – up to 5% for families with three or more children, 10% for families with two children, and 15% for families with one child. The sum of the guarantee also depends on family size – families with one juvenile child can receive support of 10%, but no more than EUR 10,000, with the numbers being 15% and no more than EUR 15,000 for families with two juvenile children, and 20% and no more than EUR 20,000 for families with three or more children.

Consultations are available at any Citadele Bank branch, by ringing +371 67010873.

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