Mortgages are a quite popular phenomenon in the Baltic States. The demand for it grows here for already 3 years. In 2015 in Lithuania the growth of mortgage loans was 21% compared to 2014, in Estonia – 15%. Latvia with 9% (according to other sources – 11%) lags significantly behind its neighbors.
Edmund Rudzitis, SEB Bank employee explains: "In 2015, the total volume of Latvian mortgages amounted to € 271 mln. This is less than the amount that the borrowers have returned to banks. Therefore, the loan portfolio in Latvia continues to decrease. According to Rudzitis, especially negatively the mortgage market in Latvia is influenced by the introduction of the rule of "left key", when borrowers who can not cope with the mortgage, can return to the Bank the collateral (the property) and thus finally free themselves from their obligations. Banks, of course, had to make major changes in the funding policies. The demand for mortgage loans declined.
Now the principle of "left key" is the optional condition, so that the quantity of borrowers in comparison with last year have increased. According to SEB, Latvia and Lithuania at the moment, have more favorable conditions for home buying. The income of the inhabitants of these countries grew faster than the cost of square meters.
It’s interesting, that in Estonia the largest loans are taken by young people aged 25 to 34 years, and in Lithuania and Latvia - under 35 years. The general trend is that the demand for mortgages is much less in the age group of 45 years and older.
