Banks want state to cover part of rate hike

The package of measures banks will propose to the Finance Ministry will provide for a reduction of mortgage installment amounts for households with debt servicing difficulties due to the rise in interest rates, either by extending the duration of the loan or through a special arrangement to subsidize the increase in the installment with the partial support of the state.

The next meeting between bank managers and the ministry is set for this Thursday. Kathimerini understands the banks will table the arrangement options they will offer their customers from the beginning of next year, such as reducing the installment for a certain period of time and extending the duration of the loan or capitalizing the interest for the period after the adjustment.

According to the same sources, banks are willing to promote measures that will not reduce the net present value of the debts they have in their portfolio over time, as otherwise they will have to be led to a reclassification of informed mortgage loans and increase provisions to cover the possible losses.

An alternative solution is to reduce mortgage installments by sharing the loss, with the state shouldering part of the cost by covering it via a subsidy for some of the increase in the installment of the loan due to the rise in interest rates. The measures should be aimed at specific categories of borrowers that have a real problem and not at the entire mortgage portfolio, that appears to be serviced normally, without currently showing any serious signs of default.

According to banks, the measures that will be jointly decided should concern vulnerable households, not necessarily according to the strict criteria defined by law, but those households that are “sensitive” to the increase in interest rates. Based on bank data, on average, the rate rise increases the monthly installment of a mortgage that currently has a variable interest rate by about 20%, but this increase does not affect all categories of borrowers horizontally. One category where, according to the banks, the problem could be identified is, for example, loans that had been included in the Gefyra 1 program for the protection of a first home, for which the period of the subsidy has expired or will expire by the end of the year.