The Ministry of Economics (EM) has developed a new mortgage lending programme that will make mortgage loans available to private individuals for buying homes in the regions. At present, public funding of EUR 25.8 million has been allocated to run the programme up to 2029, and ALTUM can raise additional financial resources of up to EUR 80.3 million.

This will address a market failure – insufficient availability of mortgage loans in the regions – and will encourage home buying in those Latvian municipalities where mortgage lending has so far been less active.

The draft regulation “Rules on loans for buying a home in the regions”, drawn up by the EM, was approved by the government on 14 October.

“More than 3,000 families in Latvia's regions will, through the financial institution ALTUM, gain unprecedented opportunities to obtain a mortgage loan to buy a home. Mortgage lending is one of the most important preconditions for the development of the regions – if people are able to plan their future and buy a home, then new businesses will also be opened and new jobs created more often,” says Minister for Economics Viktors Valainis.

The mortgage lending programme will be run by AS “Attīstības finanšu institūcija Altum” (ALTUM), which will also have to ensure that the mortgage loan rate is not lower than the average mortgage loan rate on the financial market.

Mortgage loans will be available for buying homes only outside the city of Rīga and the surrounding Pierīga area. The loan amount will be up to 100 minimum monthly salaries, or EUR 74,000, with a term of up to 30 years. Applications for mortgage loans under the new programme are expected to open at the end of October.

On 25 July this year, following intensive and focused work by the EM, the European Commission decided to allow ALTUM to broaden its scope of activity – to issue mortgage loans to private individuals for buying homes in the regions.