A Latvian mortgage — a security right registered in the Zemesgrāmata that gives a lender priority over the property if the borrower defaults.
A hipotēka (mortgage) in Latvia is a real security right (lietu tiesība) that encumbers immovable property in favour of a creditor. It is created by a notarial deed and registered in the Zemesgrāmata, where it appears in the third section of the property entry.
Latvian law recognises first-ranking and subsequent-ranking mortgages. Priority is determined by the order of registration. A first-ranking mortgage gives the holder the right to be satisfied from the sale proceeds before any subsequent mortgagee.
The mortgage secures a specific sum (the secured amount) plus interest and costs. The secured amount is stated in the mortgage deed and need not equal the loan amount — lenders often secure a higher sum to cover future advances and costs.
Upon full repayment the mortgage must be formally deleted from the Zemesgrāmata. This requires a notarial discharge deed (dzēšanas lūgums) submitted by the lender. Until deleted the mortgage remains visible in the register and can complicate a sale.
Foreign buyers financing a Latvian property purchase with a loan from a non-Latvian bank should confirm that the lender is prepared to register a Latvian hipotēka. Some foreign lenders are unfamiliar with the registration process, causing delays.
Yes, provided the mortgage is discharged at or before completion. The purchase funds are typically used to pay off the seller's mortgage directly to the lender as part of the transaction.
The lender can apply to court for an enforcement order and sell the property at auction. The proceeds satisfy the mortgage debt first; any surplus goes to the borrower.
Latvian law does not set a maximum term. Banks typically offer terms up to 30 years for residential mortgages, subject to the borrower's age at the end of the term.
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