Excellent results in mortgage lending during the ten months of 2006
During the first ten months of this year Nordea’s mortgage lending portfolio has grown by 80%, totalling to 331,5 million lats (147 million lats in the beginning of 2006), thus ensuring Nordea’s position as third largest mortgage lender in Latvia. It is planned that Nordea mortgage lending portfolio will reach 378 million lats in the end of 2006.
Jana Strogonova, Head of Retail Banking, Nordea Latvia: “Such a considerable growth of Nordea’s portfolio is natural, though the growth rate is higher that the market’s growth rate. Nordea’s offer is far more competitive and stands out among the other banks’ offerings thanks to easily comprehensible lending policy, low interest rates and a set of additional benefits for customer”.
“Nordea is the first bank that offers several efficient tools to manage the risks of interest rates’ fluctuations. Virtually any housing loan customer can use these tools to protect the household from harsh changes in monthly payments. Furthermore, we are constantly running special offerings to the different customer groups, who have special needs and purchasing power differs. We are especially focusing on segments that have difficulties in financing purchase of a dwelling. For instance, Nordea is engaged in the Governmentally supported grants’ program, which ensures that families with small children and those living in denationalised houses will be able to get a loan of 100% of the real estate value, thus ensuring that these socially sensitive segments have a decent place to live in. Further, Nordea is very active in refinancing loans issued by other Latvian banks, thus helping people to cut the monthly loan payment and enjoy a considerable saving in a long run”.
Rapid growth of the private mortgage lending volumes has a positive effect on the real estate market development. According to the Nordea’s information, majority of the loans are taken for purchase of a new house, apartment or construction of a new house, which makes more than 50% of the total Nor-dea mortgage lending portfolio. On average, customers in Riga take loans of 40 thousands lats, while in Sigulda and Liepaja average loan sum is 17 thousands lats, in Valmiera or Daugavpils – 14 thousands lats. On average, customers tend to choose loan maturity of 10-15 years, while apartment renovation loans are 3-7 years long. House purchase or construction loans usually have 15 or even 30 years maturity.
According to Nordea’s opinion, during the next three years mortgage lending market volumes would reach 9 billion lats.