Baltic youths predominantly willing to spend up to EUR 300 per month to pay down a housing loan | Luminor

Respondents in the Baltic states aged 20 to 30 would be willing to allocate up to 300 euros per for a month mortgage loan payment. In Latvia, 24% of those in the 26–30 age group could afford such an amount, as opposed to 14% of those aged between 20 and 25.

Overall, 42% of residents of Latvia in the 20–30 age bracket have considered purchasing a home in the next five years. Asked how much they would be willing to set aside for a mortgage payment, those in Lithuania and Estonia mostly responded that they could afford EUR 201–300 – 25%, or one-fourth of youths in Lithuania, and 23% of those in Estonia, gave responses in this range. Just one-fifth (20%) of the Latvian demographic would be able to afford a payment of between 201 and 300 euros. 

“It is certainly positive that almost half of Baltic youths are planning to purchase homes of their own going forward, seeing it as a good investment in their future. Although the amounts respondents in each country can devote to this goal may vary, one in every ten youths in Latvia would be able to dedicate up to 400 euros on average to this goal. This is more than the average monthly housing payment according to Luminor’s data, which stands at 320 euros. In Lithuania, 15% of youth respondents could pay from 301 to 400 euros per month towards a mortgage loan, with 14% in Estonia. The disparity is explained by higher rates of income among youths in our neighbouring countries, and possibly by their greater savings and financial stability,” notes Kaspars Lukačovs, Home Lending Manager at Luminor in the Baltic States.

The same survey also indicates that some young people in the Baltics are currently unable to afford a housing loan at all. These were predominantly respondents in the 20–25 bracket, where mostly are still studying and may still be looking forward to their first employment opportunity. The survey shows that a fifth of youths in the Baltic states are unwilling to take on credit obligations. 

“Before undertaking a loan, people should consider their long-term financial situation. Although young people often think that a mortgage is a lifetime commitment, this is not the case. The amount and duration of loan payments can be adjusted to one’s income and capabilities, and a mortgage payment may actually turn out to be lower than the cost renting a flat. Youths also have access to state support mechanisms which make home purchases more affordable. In Latvia, Altum provides support programmes for young professionals and families with children, reducing the amount of the down payment for a new mortgage. Today, families expecting a child are also eligible for support, so they can take care of the housing situation before birth,” the Luminor representative adds.