OREANDA-NEWS.  May 14, 2013. In Q1 2013, as the number of contracts for the sale of real property in Lithuania increased 10%, the number of mortgage loans granted also increased.

The number of mortgage loan contracts finalised by Danske Bank in Q1 2013 grew 2.8 times compared to Q1 2012. The average amount of mortgage loans in Q1 2013 was about LTL 192,000, and the total amount of mortgage loan contracts was about LTL 33 million.

"Compared to a few years ago, we can now see the real property market becoming more active and people demonstrating more interest in purchasing housing. It should be mentioned however that people have learned the lesson of the recession, as prior to assuming any long-term financial obligations they evaluate their possibilities more responsibly, choose shorter loan terms, actively seek advice, and compare the conditions offered by different banks", Jurate Nedzinskiene, director of the Private Banking Division of Danske Bank, said.

Only half the mortgage loans granted by Danske Bank have a term of 25–30 years. In regards to the remaining contracts, customers choose shorter terms; over one-third of the loans have a term of 15–24 years, and 14% of the loans have a term of 5–14 years. Furthermore, 67% of the contracts involve two or more parties assuming financial liabilities, and as soon as people earn any additional income their first step is to cover their financial obligations to the maximum extent possible.

"The needs of individual customers are fairly different: some want the lowest monthly instalments possible, while others want to repay the loan as quickly as possible. Yet our experience shows that if banks set clear requirements for parties eligible to receive a loan, customers are able to better evaluate their needs and possibilities, which in turn prevents them from taking any unjustified decisions. We also pay major attention to the preparation of individualised offers: as many as 7 out of 10 customers who receive a positive reply and are offered a loan actually sign a mortgage loan contract", Ms Nedzinskiene said.

According to Ms Nedzinskiene, most mortgage loans are provided in Vilnius, Klaipeda and Kaunas. These loans are most often used to purchase new housing: the greatest share goes to the purchase of apartments, although an increasing number of customers are looking for loans for the construction of detached houses.