Mortgage is a type of loan given either in exchange for real property (i.e. the property is given as a collateral) or for the purpose of acquiring, building, renovating or investing in real estate. Thus, if a buyer of a property receives money to buy a house, it is a mortgage loan. If a real estate owner puts a lien on his/her apartment (i.e. guarantees that the apartment will become the property of the bank, if the mortgage is not paid off) to receive a loan for any purpose – it is also a mortgage.
In Latvia bank and non-bank mortgages are available. Additionally, besides regular mortgage, it is possible for families with children to apply for a government-backed mortgage, in which case, if a loan cannot be paid back, it is covered by the government.