Insider Business Banks trying to lure new clients with low interest housing loans

Banks trying to lure new clients with low interest housing loans

With the island’s economy on the mend, banks in Cyprus with a recorded very high liquidity are offering attractive plans so as to lure new clients. What seems to be highly appealing are low interest loans for the purchase, construction or renovation of a home or apartment. Or for the purchase of land for the immediate construction of a home.

Housing loans currently on the market include low interest rates, grace period, low instalments and a long payback period. The amount of the mortgage can cover up to 80% of the property’s purchase value for a first home acquisition and up to 70% for a second home.

The terms of repayment include equal monthly instalments which can be even below €300. The debtor’s age should not exceed 65-70 years at the loan’s maturity. Maximum repayment time is 30-40 years and minimum is 10-15 years.

Banks give a grace period of up to two years after the first loan disbursement but also the possibility of granting additional credit facilities to meet personal or consumer needs. Mortgage interest rates are at historically low levels, according to the Central Bank of Cyprus.

The interest rate on loans for housing fell to 2.13% by end of September with the total annual percentage rate (APR) standing at 2.84%. The interest rate on mortgages remains at almost the same level with very few fluctuations.

However, in September last year the average market rate for a mortgage loan was more expensive, reaching 2.37% while the APR was at 3.30%. The average interest rate on mortgages cannot be compared at all with that in 2008 which reached 6.47%, while the APR was at 6.84%. The most significant reduction in the cost of mortgage loans was recorded in 2013 and 2014.

Despite historically low interest rates, household demand is lower than in the past and is associated with high lending and non-performing loans. Mortgages stood at €675 million, up by 6.9% in January-September 2019 compared to the same period last year, during which a total of €632 million were granted.

Central Bank data shows that new home loans increased to €77.8 million in September, compared to €64.3 million the previous month.

 

Read more:

https://in-cyprus.com/options-for-housing-loans-in-cyprus/

Top Stories

30-year-old arrested for breaking into and stealing from photo studio

A 30-year-old in Paphos has been remanded in custody for breaking into and stealing from a photo studio. The police are also looking for...

Woman in custody for knife possession

The Dhekelia British Bases police arrested a woman near the Strovilia checkpoint regarding possession of two large-bladed clasp knives. The policemen found the woman in...

SMS for Troodos – The nature trails

The Nature Trails constitute one of the most special choices of outdoor activities and particularly during this time of year, when we have no...

Electricity Authority: New prices in place

Every year the EAC is obliged to submit to the Cyprus Energy Regulatory Authority (CERA) new tariffs for approval. The prices are calculated aiming...

Three aftershocks recorded after Thursday’s earthquake

Three aftershock measuring less than 2.5 on the Richter scale have been recorded since the big earthquake that took place on Thursday, at 16:27,...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...