The Sorainen team, representing the Fintech Latvia Association (FLA), successfully prepared a proposal to add a new Section 8.⁷ to the Consumer Rights Protection Law, coordinated it with the relevant authorities, and defended it before the responsible Saeima committee. The amendments create a new type of lending product on the Latvian market – an equity release credit with limited liability, secured by a mortgage over real estate other than the consumer’s home. The Saeima adopted these amendments on 20 August 2026, and they are expected to enter into force in mid-September this year.

Why this regulation is needed

Latvia has one of the lowest ratios of loans to non-financial domestic corporations and households relative to GDP in the European Union – in the second quarter of 2024, it reached 27.5%, compared to the eurozone average of 76.9%. At the same time, there is a real problem in practice: consumers who own real estate but have irregular income, or income that does not meet expected future levels, are practically unable to obtain a loan that would allow them to invest in improving their economic situation – for example, to obtain an expensive professional qualification, cover education or healthcare costs, or refinance high-cost debt. As a result, such consumers are forced to sell their property even when they do not wish to do so.

What the new regulation provides

The new Section 8.⁷ introduces a lending product with a built-in, enhanced level of consumer protection:

  • The consumer’s liability is strictly limited to the mortgaged real estate – if the sale proceeds do not cover the full debt, the remaining balance cannot be recovered from the consumer
  • The consumer’s home may not be used as security for this loan – the consumer cannot lose the roof over their head as a result of this loan
  • The loan amount may not exceed 70% of the market value of the real estate
  • The lender may take into account the consumer’s plausible and documented future income, including income from the mortgaged real estate
  • The purpose of the loan must be related to improving or securing the consumer’s level of well-being – irresponsible forms of consumption are excluded

Ramona Miglāne, Sorainen Partner and Head of the Financial and Insurance Practice Group at the Latvian office:

“This is a significant step in modernizing Latvia’s consumer lending market. The regulation addresses a specific problem – it allows people who own real estate but have irregular income to access the value of their capital and invest in improving their economic situation without having to sell their property. At the same time, the product ensures a high level of consumer protection – in some respects even higher than a standard mortgage loan, since the borrower’s liability is strictly limited to the mortgaged property, and the consumer’s home remains untouched. I am particularly pleased with the constructive cooperation with the Bank of Latvia, the Consumer Rights Protection Centre, the Ministry of Economics, the Finance Latvia Association, and the Saeima’s National Economy, Agriculture, Environmental and Regional Policy Committee in developing and refining this regulation.”

Tīna Lūse, Head of the Fintech Latvia Association:

“Latvia’s fintech sector is actively engaged in legislative processes to promote the development of innovative products that meet market needs and serve consumer interests. This regulation is a clear example of how a responsible legislative initiative can simultaneously expand access to lending in Latvia and strengthen consumer protection. Thanks to the professional support of the Sorainen team – in preparing the regulation, coordinating it with the relevant authorities, and defending it before the Saeima committee – we were able to successfully advance this proposal.”

The Sorainen team

The project was led by Sorainen Partner Ramona Miglāne. Counsel Inese Heinacka and Assistant Lawyer Evija Velvele also worked on the project.