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:

Top Stories

Two new Covid cases in education and repatriations

Two new coronavirus cases were reported today by the health ministry, a drop from yesterday's eight, out of a total of 2128 tests, raising...

Minister: Back to school for 769 pupils with disabilities

  More than 760 children with disabilities who were told they could not go back to school when primary and lower secondary schools reopened last...

Police to step up checks at restaurants, cafes after weekend of ‘lack of discipline’

  Police will step up checks at restaurants and other catering establishments amid fears that distancing and other rules were being broken by customers set...

Sampling for Covid in schools continues, completed tests near 7,000

The Education Ministry said on Monday that 6,900 Coronavirus tests have been fulfilled island-wide in kindergartens, primary and secondary schools as mobile units continue...

Labour inspectors close down 3 Nicosia construction sites

  Labou inspectors carried out 363 inspections over the weekend and on Monday, of which 322 were in shops where they found a very satisfactory...


Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...

Honey Balls

As you stroll down Onasagorou street in the old city of Nicosia and suddenly feel the need for something sweet, follow the smell of...

Octopus with Oregano

Ingredients: (Serves 4) 1 kg octopus ½ tsp dry oregano Pepper 3 tbsp olive oil 2 tbsp vinegar or lemon juice Preparation: Clean the octopus thoroughly under cold running water. Place the octopus...

Fish meatballs

In a bowl, mix the finely chopped onion and parsley. Boil the fish, cut into small pieces and add to the bowl. Add salt...