Rent and save
Accrued rent is a new product from Apella. This product, which has been developed by specialists of Apella and Rietumu Bank with account of the market requirements, is an original scheme for the leasing of real estate with an option of subsequently purchasing it.
Accrued rent is much simpler and more beneficial in comparison with a general mortgage and has a number of special convenient features and advantages:
- The first instalment to be paid by the client when concluding the agreement is 5-7% of the cost of the leased apartment;
- The amount of an annual payment in accordance with the lease-purchase agreement is 6% of the cost of the apartment fixed at the time of concluding the transaction; of this, half of the amount is the actual rent payment and the other half (3% of the cost of the apartment) comes to the accrued deposit account;
- All funds coming to the accrued deposit account, as well as the first instalment paid by the client at the time of concluding the agreement, will further be considered when purchasing the real estate and can be used as the initial payment in the event of mortgage lending;
- When concluding a agreement for a period of 1-3 years, the lessee gains the right to take a decision about what he will do further with the leased apartment. There are several options:
The lease agreement can be concluded for a long term;
When there is a wish and funds required for the first instalment, the lessee can conclude a standard mortgage agreement for the leased real estate, for which he can obtain a loan at Rietumu Bank or at other banks;
In the event his life plans change or due to any other reasons, the lessee can terminate the lease agreement;
The lessee has the right and possibility to transfer the right of lease, together with the entire amount accrued on the deposit account, to a third party.
The results of the multi-year monitoring of the leased housing market in Latvia show that the level of lease payments in accordance with Rietumu Bank terms, is generally more beneficial for the lessee than conventional average terms on the market.
Example of calculations:
Total cost of an apartment – 85 000 EUR;
First instalment (3% of the cost of the leased apartment) – 4 250 EUR;
Monthly payment – EUR 426 (of which EUR 213 is the rent payment and EUR 213 is an instalment for the accrued deposit).
The amount accrued during 36 months of operation of the lease-purchase agreement is EUR 11 918