NewsLocalCypriots' dilemma: To buy a house and be mortgaged for life or...

Cypriots’ dilemma: To buy a house and be mortgaged for life or rent?

The dream of buying a house is becoming more and more expensive with today’s rising interest rates and sky-rocketing prices of construction materials.

Especially for young people who seem to be in a dilemma whether to buy or build a home and be mortgaged for life or rent a flat instead. Not that rentals are as affordable as they used to be – especially in certain Nicosia areas and in coastal Limassol, Philenews reports.

Currently for a mortgage loan of €200,000, repayment of payment in 20 years and with an average market interest rate of 4.5% the monthly instalment is around 1,270.

Even in the best-case scenario of a 4% interest rate the instalment is estimated at €1,210 with 20 years of repayment. An amount that is not considered a desirable one by today’s standards since the instalment is a little below the average salary in Cyprus.

In addition, among other things the interested buyer will have to have an amount set aside to finance at least 30% of the value of the property.

Basically, with the amount of €200,000 the interested party has the possibility to buy an apartment of less than 100 sqm and at best it should be second hand. If the value of the property is higher this means a bigger loan amount.

Banks do provide plans which in the first years have a fixed interest rate so the loan instalment does not change depending on the ECB policies or the bank provides the option for a longer loan repayment period which implies a smaller instalment.

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