Lithuania cuts first‑home mortgage down‑payment to 10%

From 1 August the Bank of Lithuania introduced new responsible‑lending rules that lower the minimum down‑payment for a first‑time home purchase from 15 % to 10 % of the property value for borrowers who have not owned real estate in the past five years. The reduction is not automatic; each loan‑granting institution will assess the borrower’s financial situation before applying the lower rate. For borrowers seeking a second or later mortgage the minimum down‑payment remains at 15 % (or 30 % for subsequent loans), although an exception allows a 15 % down‑payment if the borrower has repaid more than half of any existing mortgage.

The new rules also replace the previous two‑limit test with a single requirement that monthly mortgage payments may not exceed 50 % of a borrower’s income, while the interest‑rate floor stays at 6 %. “These changes create more opportunities for first‑time buyers while preserving responsible lending principles,” said Nijolė Valinskytė, director of the Financial Stability Department at the Bank of Lithuania. Governor Gediminas Šimkus added that rapidly rising house prices have made a 15 % down‑payment difficult even for financially capable buyers, prompting the adjustment to support affordability and maintain the resilience of the financial system.