Banks in Lithuania will have to offer their customers the opportunity to pick the type of interest on mortgages, presenting them with both variable and fixed rate options.
The Lithuanian parliament on Thursday adopted the amendments after 103 MPs voted in favour and two lawmakers abstained.
The Seimas obliged banks to provide people with at least two alternatives of choosing a mortgage with a fixed rate for at least 5 years or a variable interest rate.
Banks that could not offer a 5-year fixed rate would have to propose ways to reduce or manage the risk of fluctuations in variable interest rates for at least 5 years.
The new rules will apply to financial institutions with a mortgage portfolio exceeding 50 million euros.
According to the Bank of Lithuania, last year, on average 3 percent of new loans were issued at an interest rate fixed for more than one year, compared to 78 percent in the euro area.
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