Luminor: Mortgage loan market is growing with every day
“Assessing the results of mortgage lending for the first quarter, we may be certain that this segment is warming up”, says Normunds Rudzitis, Head of Household Banking at Luminor. “We can see that the interest of people and the number of issued mortgage loans is growing with every day. At Luminor the biggest increase was observed in March, when mortgage loan transactions reached 32% of the total market - it means that we have strengthened our positions by issuing every third mortgage loan.
Normunds Rudzitis explains that the increase in March may be explained with the new and extended Altum program, which is tailored up for young professionals. It is on high demand and the number of applications continues to increase. Already now the loans issued by Luminor in both Altum programs have reached almost half of the total number of mortgage loans.
“This year the preconditions for the rise of crediting market are very good and the potential is huge, which will promote the purchase of residential premises as well as their renovation and building and undoubtedly will improve the overall quality of housing,” tells Rudzitis. “It is very important, as until now the investments in residential property amounted to a mere 2% of the gross domestic product, which listed Latvia second from the end in the European Union, surpassing only Greece.” Estonia, in its turn, currently is very close to the average number throughout EU, which last year was 4.9% of GDP. Insufficient investments lead to obsolescence of residential premises and to their shortage in the economically more attractive parts of the country.
During the first quarter Luminor issued mortgage loans for the total amount of 31.9 million euros. The majority or 75% of mortgage loans issued by Luminor were used for the purchase of residential property in the capital. The average amount of loan was EUR 60,248 and the average maturity was 19 years. Mortgage loans were mainly used to purchase two- or three-room apartments.