Mortgage payment support to be considered in Latvia

The Saeima Budget and Finance Committee will continue discussions on the protection of mortgage borrowers, including a 50% reduction in loan interest payments for one year, the Chairman of the Committee Jānis Reirs (New Unity) told Latvian Television on October 3.

Reirs said that payments of mortgage interest — Euribor rates and interest rates applied by the bank — could be subject to a 50% reduction.

"We want to set this support within a limited time frame. We will set a specific reduction in interest on loans for one year and we will assess the situation a year later. There are various examples of interest rates being cut. There is a 50% reduction in our initial offer," Reirs said, noting that the percentage reduction could yet change.

The application of the rebate for a year is planned in view of the fact that the European Central Bank could still raise interest rates, as well as the fact that a high Euribor rate could persist for at least another year.

"We have come to have ridiculously low credit volume, a third of gross domestic product (GDP), which is probably the lowest in the European Union (EU), we have the highest rates, we have virtually no flexibility. We have the right to support borrowers for a certain period of time,” Reirs said.

The Committee has drawn up a proposal for the protection of borrowers. It is yet to be considered and adjusted so that the Committee can vote on the proposals on Wednesday and refer them to the plenary session of the Saeima. Reirs said that in the first reading in the Saeima, a vote could be expected next Thursday.


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