Latvian PM wants to support more households with mortgage loans

Support to compensate the rapid growth of mortgage loan payments should be provided to all households, said Latvian Prime Minister Evika Siliņa in an interview to LTV Rīta panorāma on Wednesday, the 4th of October. She also explained the government’s tax policy.
The politician said mortgage loan payments have increased disproportionately for private persons, and when it comes to support, there is no real reason to view households based on their income level.
Aktum guarantees could be provided to support households in trouble. The PM admits that

the government has reserved EUR 12 million towards such guarantees.

This amount may become available to households experiencing financial difficulties caused by growing mortgage loan payments next year.
Siliņa admits this support may become available to borrowers whose mortgage loan interest payments exceed 40% of their household’s general income.
She mentioned that the Saeima’s Budget and Finance Committee has taken to resolving this issue rather aggressively. Banks are invited to propose their own solutions to the problem if they are unhappy with the government’s decisions.

The PM has met with bank representatives,

inviting them to present their ideas. One bank suggested lowering interest rates by one percentage point for a limited period of time. Siliņa did not say how long it might take to find a solution, considering the problem of large interest payments is a problem now. She only said that

some solution will be adopted together with the next year’s budget.

Discussions will continue.
As for the possible tax changes that have already received bashing from various businesses, Siliņa mentioned New Unity’s commitment to perform major tax changes once every Saeima term. She explained that this year tax changes “are not major or important”. According to her, they are mostly clarifications, adding that the “large tax group” will soon restart discussions.
The Ministry of Economy and employers will meet soon, and Siliņa hopes a compromise will be reached.
Explaining the government’s plan to drop the reduced VAT rate for vegetables and fruits, Siliņa notes that it was concluded that foreign producers were the ones who benefited from this reduced tax rate the most. This is why it is planned to adopt a special form of support for local vegetable and fruit producers. Funding of EUR 3 million is reserved for this support.
Also read: Latvian government conceptually agrees on 50% discount for mortgage loan interest rates