Mortgage loan

Two in every three borrowers who reached the penultimate step before the final submission of their application to join the mortgage installment subsidy program have canceled it on their own initiative, as a result of which the number of beneficiaries is only 4,527 to date.

The banking market is witnessing a trend of conversion of mortgage loans that were contracted with a floating interest rate into a long-term fixed interest rate (mainly five years), as the persistence of inflation at high levels continues to make borrowers nervous about the evolution of interest rates after the end of the freeze that banks have implemented.

Young people in Cyprus are facing difficulties in securing mortgage loans due to a number of factors, according to Cypriot economist Tassos Yiasemidis.

Since July 2022, lending rates in Cyprus have risen by 3.5%, putting borrowers in a tough position with dangerously increasing loan repayments. Banks are now searching for ways to alleviate the situation, and they may have found a way to offer some "breathing space" to borrowers with mortgages.

Lenders may have been inundated with applications from young people regarding the My Home housing program, but that does not necessarily translate into numerous loan disbursements.

The pool of homes that qualify for the government's My Home ("Spiti Mou") program is smaller than in the recent past. This is the program that, in cooperation with the banks, subsidizes mortgage rates to help young people (up to the age of 39) enter the housing market. It concerns properties worth up to 200,000 euros, at least 15 years old (built before 2007) and up to 150 square meters

Property market experts are expecting a stabilization of residential sales prices for 2023, per a Cerved Property Services survey.

Eurobank, Piraeus and Alpha Bank have announced that they will be keeping mortgage installments at their current levels for 12 months. As pledged by the first two banks, the baseline rates of serviced mortgage loans will remain at the levels they were on March 31, 2023, minus 20 basis points, for 12 months, starting in May. National Bank is expected to follow suit.

Banks are stopping any further rises in mortgage rates, freezing interest rates at a date reportedly set for March 31.

This means that any increases made after last Friday or due to be made from now on in the interest rates that form the basis of reference for housing loans will not be applied.

The National Assembly has passed a law designed to reduce the impact of the annual increase in the minimum wage on households' creditworthiness after the latest increase rendered much of the population ineligible for a mortgage.