Low-rate mortgages for young people
The Public Employment Service (DYPA) is expected to issue a public invitation to banks in the next few days in order to pave the way, toward the end of March, for the granting of at least 10,000 low-interest mortgage loans to young people aged 24 to 39.
Young citizens with an income of between 10,000 and 16,000 euros per year or couples with a joint income of up to €24,000, plus €3,000 for each child, have the right to participate in the housing program.
According to the joint ministerial decision published in the Government Gazette, the loan is 75% financed by DYPA with no interest due on this section of the loan, while the remaining 25% is granted by the banks. This means that three quarters of the loan is interest-free, so that the final interest rate that the borrower pays for the entire amount is a quarter of the cost of a normal mortgage.
Therefore, in practice, to obtain a loan of €150,000 (which is also the maximum allowable limit) in order to buy a property worth €200,000, instead of an interest rate of 4.7% for 30 years, the beneficiary of the program will pay an interest rate of 1.17%. If it concerns a couple with three children, and with at least one of the two adults under the age of 39, the interest rate will be zero, as the loan will be fully covered by DYPA.
The houses for which young people will be able to get a mortgage loan must be over 15 years old, with a building permit issued up until 2007, and not exceed 150 square meters.
Before a loan’s disbursement, the bank is obliged to inform the Hellenic Development Bank and DYPA about the check it has carried out on the beneficiary’s eligibility and the property to be acquired.
In the event of a delay in paying an installment of more than 30 days, the bank will classify the borrower as non-cooperative, and if they do not pay after 90 days of continuous arrears, the bank can terminate the contract.
