Lithuania eases housing rules, lowering down payment for first-time buyers

Lithuania's central bank is easing the path for first-time homebuyers by reducing the initial down payment requirement from 15% to 10%. This adjustment to the Responsible Lending Regulations is intended to provide more opportunities for individuals to enter the property market.

“

For example, when buying property worth 150,000 euros, instead of 22,500 euros, it will be enough to have 15,000 euros. This is a difference of 7,500 euros – a sum that a young family in the capital or other major cities sometimes saves for five to eight years.

For a property valued at 150,000 euros, the required down payment will decrease by 7,500 euros, a sum that can take young families five to eight years to save in major cities. Real estate analysts view this as a positive signal, particularly for young professionals and families with good incomes but limited savings history.

“

The reduced initial down payment can be a boost for buyers. We have several cases where people have identified housing and are asking for support, to wait until the lower initial down payment limit is applied.

However, the lower down payment does not guarantee easier loan approval. Banks will continue to rigorously assess buyers' financial stability. Additionally, loan installment limits are being revised, with a single requirement that monthly payments should not exceed 50% of income, calculated with a minimum 6% interest rate. This adjustment means that while the initial down payment is lower, monthly payments could increase, requiring higher documented income.

“

These are rather guidelines that credit institutions can follow. In other words, the Bank of Lithuania allows a lower down payment requirement, but does not oblige them to do so.