Cyprus banks set to reward borrowers
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.
Banks are expected to announce a measure soon that would provide reliable borrowers with reimbursement of some amount at the end of the year. This measure would apply to housing loans worth up to 350,000 euros, linked to the Euribor or ECB base rate and which are up to date. Some banks may continue to receive the installment at the set interest rate, but there will be a limit, and any payment above this will be returned to the borrower at the end of the year. The loan must be serviced normally before and after the measure’s announcement.
It is estimated that banks in Cyprus alone have €2-3 billion euros in mortgages that meet the criteria for this measure, excluding loans from credit purchasing companies. An announcement is expected in May, with pressure from the Finance Ministry to keep the Cypriot economy in good shape. Still, not all banks may announce it as it may not fit their lending profile.
