Loans

1 Clients who wish to purchase real estate in Latvia can obtain a mortgage loan for the purchase of real property.

What are the main arguments in favor of bank financing? First, it offers a low interest rate. The average annual rate does not exceed 6% of the loan amount. Second, it provides simplicity in loan processing. Third, it allows you to purchase real estate in Latvia without spending all your savings on the purchase.

Specifically for its clients, KOM-INVEST has prepared a brief description of the mortgage loan process for the purchase of real property in Latvia.

1) What types of properties does the bank finance?

Banks typically issue loans secured by apartments, houses, or commercial properties (residential buildings, retail spaces, investment projects).

At the same time, banks rarely finance the purchase of undeveloped land for private construction.

2) What loan amount can a non-resident buyer obtain?

Typically, the maximum loan amount is up to 60% of the purchase price of the property. The loan amount largely depends on the buyer's financial situation and the type of property being purchased. For example, a buyer of an apartment in a new residential building can obtain a larger loan than a buyer of an apartment in an older building.

3) What is the annual interest rate for a mortgage loan?

Typically, the annual interest rate does not exceed 6% of the loan amount. The annual interest rate consists of two components: the bank's interest rate plus the currency rate (EURIBOR for loans in euros and LIBOR for loans in US dollars).

4) For what term can a loan be issued?

The term depends on the age of the client applying for the loan and the type of real property. For example, if a young client purchases an apartment in a new residential building, the maximum loan term can be 25 years.

5) What are the costs for processing a loan?

• Bank commission for loan issuance and processing: on average, up to 2% of the loan amount.

• State fee for registering the loan in the "Land Register" (the government agency responsible for registering rights and obligations related to real property): 0.1% of the loan amount.

6) Is early repayment of the loan possible?

Under Latvian law, a mortgage loan can be repaid early without paying penalties to the bank.

7) What documents are required to process a loan (for individuals)?

• A completed bank questionnaire with questions about the client's activities, income, and marital status.

• A document confirming income. For example, an income certificate, bank statements for the last 6 months, or a letter from the employer confirming the position and salary.

• An assessment of the real property being purchased, prepared by a certified real estate appraiser.

KOM-Invest will help you process a mortgage loan for the purchase of real property in Latvia and will answer all your questions.