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/
