Amendments to the Consumer Rights Protection Law, intended to support mortgage borrowers, come into force on January 1.
The amendments enable the provision of state support to mortgage borrowers in the amount of 30 percent of their interest payments, but not exceeding two percentage points of the interest rate set for the period.
To provide this support, credit institutions will be obliged to pay a levy “in order to protect public welfare, taking into account the burden of payments on households”.
Banks as the payers of the levy will have the obligation to calculate a 30 percent compensation on each mortgagor’s interest payments for each given quarter, but not exceeding two percentage points of the interest rate set for the period.
Borrowers whose mortgage loans have a fixed interest rate will not be eligible for the compensations.
The State Revenue Service has been tasked with administering the levy.
The levy will be paid by Latvia-registered credit institutions, consumer loan providers, as well as Latvian branches of foreign credit institutions and consumer loan providers.
The compensation will be granted to those mortgage borrowers whose mortgage agreements have been concluded by October 31, 2023 and whose loan balance does not exceed EUR 250,000.
Source: BNS
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