In short
- The minimum down payment is 10%, because a bank may lend up to 90% of the value.
- With a state guarantee, such as the ALTUM guarantee, 5% is enough.
- The bank works it out from the valuation if that is lower than the price.
- Add about 2% or more for costs: fees, the valuation and bank charges.
What the minimum down payment is
In Latvia a bank may lend up to 90% of a home's value. So you pay at least 10% from your own money. If the loan has a state guarantee, such as the ALTUM guarantee for families with children or young specialists, the limit is 95% and the down payment can be 5%.
A bank may also ask for more than the minimum, for example if your income is irregular or the home is harder to sell. For the ALTUM terms, see ALTUM guarantee for families.
What the down payment is based on
The bank usually works from the lower of two figures: the purchase price or the value set by a certified valuer. If you buy a flat for €100,000 but the valuer puts it at €95,000, the bank lends 90% of €95,000, which is €85,500. Your down payment is then €14,500, not €10,000.
That is why it pays to check the price before the deal.
How much cash you need in total: an example
A flat for €100,000, a €90,000 loan, valuation equal to the price. This only illustrates the maths.
| Item | Amount |
|---|---|
| Down payment 10% | €10,000 |
| State fee (valsts nodeva) for ownership, 1.5% | €1,500 |
| State fee for the mortgage, 0.1% of the loan | €90 |
| Property valuation | depends on the valuer |
| Bank arrangement fee | depends on the bank |
| Total | about €11,600 plus valuation and fee |
Down payment for a flat by city
What it means in cash depends on the city and the number of rooms. To work it out, find the median sale price of similar flats in your city and take 10% of it, or 5% if the loan has a state guarantee. Prices in Riga and Jūrmala are usually higher than in other cities, so the down payment will be bigger too.
How to save faster
- Set a target: 10% of the price plus at least 2–3% for costs and a reserve
- Open a separate savings account and set an automatic transfer on payday
- Check whether you qualify for the ALTUM guarantee or municipal support
- Don't take a consumer loan for the down payment: it cuts what the bank will lend you
- While you watch prices, pick your target area and flat size now
Common questions
Can I buy a flat with no down payment?
Not with a bank mortgage. The law allows lending up to 90% of the value, or 95% with a state guarantee.
Can I borrow the down payment?
Technically you can take another loan, but its payment and balance count towards your commitments, so your mortgage will be smaller. Banks usually want to see the down payment from your own money.
Does a bigger down payment lower the rate?
Often, yes. A smaller loan against the value means less risk for the bank, so it can offer a lower margin.
Does the deposit (rokasnauda) count towards the down payment?
Usually yes, if the contract states it is part of the purchase price. Discuss it with the bank before you pay the deposit.
Sources
- Borrower-based measures · Latvijas Banka
- Noteikumi par valsts nodevu par īpašuma tiesību un ķīlas tiesību nostiprināšanu zemesgrāmatā · Likumi.lv
- ALTUM atbalsts mājokļa iegādei · ALTUM
This article is for information only and is not legal, financial or tax advice. It may contain mistakes or be out of date, so check it against official sources or with a specialist before you decide. m²cena accepts no liability for any loss or damage arising from the use of the information in this article.