General information on loans secured by a real estate mortgage | Luminor
For what kind of purpose can Housing Loan have?

You can purchase a house or an apartment, also get a loan for repair/fit-out. Another option is a loan for house construction/reconstruction, Bank can also participate in the purchase of land plot.

Do I need to pledge anything for the loan?

Yes, it will be required to pledge the real estate, that is being bought or built.

What could be the maximum loan term?

Maximum loan term is 30 years, but it will be decided individually due to collateral condition, location, your creditworthiness, etc.

What does interest rate consist of?

Bank offers 6 month EURIBOR floating base rate in addition to fixed margin. If EURIBOR base rate is negative it shall be assumed as zero.

Can I be granted a Housing Loan if my income is in foreign currency?

Bank offers loans only to customers that receive income in euros or US dollars.

If your income is in US dollars and you receive a loan in euros, such loan in the context of the consumer rights’ protection enactments is considered a loan in foreign currency.
Drawing of such loan exposes you to the foreign exchange rate change risk, meaning that after entering into the loan agreement the value of your income currency compared to that of the
disbursed loan currency may decrease due to fluctuations of the exchange rate between your income currency and that of your loan. Such occurrence may encumber your
monthly payments, as to make the above payments in the loan currency you might need a bigger amount in the currency of your income as compared to the situation upon
entering into the loan agreement.

To be granted such loan you must be aware that there may be such unfavorable exchange rate fluctuations and you will have to make sure to make loan instalments in time according to the agreement.

What loan repayment method can I choose?

A loan may be repaid either in linear or annuity method.

Should you choose the linear repayment method, the monthly payments will vary in the amount – the loan repayments will be distributed throughout the period in such a manner - larger at the beginning of the loan period and then become smaller towards the end of the loan period. While repaying the loan in this manner the total amount of the interest paid will be smaller, because outstanding amount (from which interest is calculated) will be amortized faster.

Should you choose the annuity method, you will pay loan payments of an equal amount each month. At the beginning of the loan repayment period your monthly payments will be smaller than repaying the loan according to the linear method, thus there will be more funds left for other needs.

Can I repay earlier than the maturity of the loan?

You are free to repay the loan or any potion thereof before the due date.

If the loan is subject to the floating interest rate in case of an early repayment of the loan or any portion thereof, refinancing of obligations by another creditor or selling the
pledged property to the Bank you shall cover the fees for consideration and execution of documents underlying such proceedings.

If the loan or any portion thereof is repaid over the period that is subject to the fixed interest rate you may be asked to recompense early repayment of the loan obligations. Such
compensation the Bank shall calculate pursuant to the contractual provisions and limitations for application of such compensation imposed by regulatory enactments. Anyway, such
compensation cannot exceed 1 % of the loan amount that is repaid before the due date. Should the Bank request such compensation, no fees for consideration or execution of
documents underlying early repayment of loan or any portion thereof are applied.

What should I know about the evaluation of the collateral?

To obtain a loan you must submit to the Bank the collateral's evaluation prepared by any of the Bank’s approved real estate valuators. Information about the valuation costs is
accessible at the respective valuator's webpage.

Prior to ordering a valuation we encourage you to find out your creditworthiness by consulting with the Bank’s specialist.

What are the consequences of late payments?

In case of an overdue payment you may incur a penalty or default interest on the late amount. In case of long or repeated default the Bank may request early repayment of the entire
disbursed loan.

In case of a default as a last option may be applied the sale of the pledged property. If the real estate is sold for an amount that is below your loan obligations you will still be held liable for the repayment of the difference to the Bank. Should the difference remain, the Bank shall accrue the penalty or default interest on the late amount. Debt collection may be turned to the obligor's or surety's movable or immovalbe property as well as their income. You may be held liable also for the official receiver's  expenses.

You will not be asked to cover the above difference if under the agreement your loan is subject to special provisions stipulating that the real estate is a sufficient security to redeem the obligations to the bank in full.

If you experience any difficulties with your monthly payments, you are kindly asked to immediately contact us to find a solution.

Other things I should know?

To obtain a loan you will need some additional services, i.e.:

  • Maintain a current account and Internet-bank in Luminor Bank AS Latvian Branch for the entire loan repayment period.
  • Prior to the loan disbursement and over the loan repayment period purchase and maintain a real estate insurance policy in compliance with the Bank’s requirements, which can be purchased from an insurance company at your own discretion.
  • You shall qualify for better lending terms and conditions if you will:
  • Prior to drawing the loan purchase and maintain over the entire loan repayment period an insurance policy issued by ERGO Life Insurance SE on the borrower’s life insurance for the respective loan amount and period, specifying the Luminor Bank AS Latvian Branch as beneficiary in the insurance policy.
  • Transfer your monthly income to your current account with the Luminor Bank AS Latvian Branch.

Representative example of a housing loan

Real estate price Loan amount Loan maturity Initial payment Agreement fee Annual Percentage Rate
EUR 70 000 EUR 59 500 30 years EUR 10 500 EUR 595 (in standard 1% from loan amount 2.4 % (including base rate 0% 15.07.2020. – changes every 6 months) 
Bank account maintenance monthly fee Monthly instalment (360 times) Payment for the registration of a mortgage in the Land Register Annual Percentage Rate (APR) Total amount payable  
EUR 1 per month EUR 232 EUR 73.73 2.55 % EUR 84 544  

Loan securing – mortgage on the real estate to be purchased. Bank financing up to 85%.
To get the loan, you need a Luminor account and an Internet bank, evaluation of Real estate, Real estate insurance throughout the life of the credit agreement.
Additional costs not included in the APR: Real estate insurance premium, Real estate appraisal costs, notary services, payment transaction fee for issuing a loan (if payment is made to another bank).

These estimates are for information only. The bank's offer may vary from case to case.