Reduction in Housing Loan Rates Has Allowed Borrowers to Save 65.7 Million Euros

Since January 2025, the reduction in the added interest rates of mortgage loans has allowed borrowers to save approximately 65.7 million euros in total, according to the Financial Accessibility Report of the Bank of Latvia, as reported by the LETA agency.

From January 2025 to August 2026, the added interest rate was reduced for 14,543 mortgage loans. Of these, the rate was reduced for 13,195 loans with the existing lender, while 1,348 loans were refinanced with another lender.

The total value of loans for which the added interest rate was reduced during this period exceeded one billion euros, or about 22% of the total mortgage loan portfolio at the beginning of 2025.

Estimates by the Bank of Latvia indicate that borrowers who achieved a reduction in the added interest rate with their existing lender saw an average reduction of 0.45 percentage points. Meanwhile, borrowers who refinanced with another lender saw an average reduction of 0.75 percentage points.

The average annual interest payment savings for borrowers who agreed on a rate reduction with their existing lender is approximately 350 euros, while for those who refinanced with another lender, it is approximately 500 euros.

In the remaining loan term, the average savings are estimated to be approximately 4,700 euros and 8,000 euros, respectively. The total estimated savings for borrowers from the reduction in added interest rates reaches 65.7 million euros.

The report indicates that refinancing activity decreased in 2026, although it remains significantly higher than before the regulatory changes that simplified mortgage refinancing.