Support for mortgage loan takers in 2024 - loan interest compensation

19.12.2023

On 6 December, the Saeima adopted amendments to the Consumer Rights Protection Law, which foresees support for mortgage loan takers in 2024. The support is granted for one year, amounting to 30% of the quarterly paid interest on the loan. The bank will individually calculate the relevant amount and notify the State Revenue Service, which will transfer it to the borrower's account. Mortgage loan takers are not required to submit applications or otherwise apply for the support. The compensation will be paid out of the State budget revenue generated by the mortgagor protection fee paid by banks.

In accordance with the amendments to the law, loan interest compensation will be provided to natural persons - consumers, whose:

mortgage loan agreement is concluded by 31 October 2023;
outstanding balance of the mortgage loan does not exceed EUR 250 000.

The support does not apply to those borrowers whose mortgage loan interest rate is fixed for the entire loan repayment period according to the agreement.

How much compensation will be available?

Mortgage loan borrowers will receive compensation equal to 30% of the quarterly interest payments, calculated according to the respective mortgage loan agreement, but not exceeding 2 percentage points from the specified interest rate (total borrowing rate).

Based on the previously mentioned conditions, at the end of each quarter, the bank will individually calculate the compensation amount due to each mortgage loan taker for that quarter. The bank will then notify the State Revenue Service, indicating the account number to which the payment is to be made.

At the end of each quarter, the bank will also send each borrower precise information on the exact amount of compensation calculated for the previous quarter and the account number to which it will be paid.

When is the compensation planned to be paid?

The State Revenue Service is expected to pay compensation for each quarter of 2024. In total, four payments are planned:

In April 2024 (by 30.04) for the first quarter
In July 2024 (by 30.07) for the second quarter
In October 2024 (by 30.10) for the third quarter
In January 2025 (by 30.01) for the last quarter.

How will the compensation be paid?

The compensation payments will be made by the State Revenue Service to the borrower's account, which the bank will provide to the State Revenue Service.

More information on support for mortgage loan takers will be available on our website once we receive more detailed guidance on the application of these provisions of the law.

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