NewsLocalHigher loan installments as from September 14 after ECB's interest rates hike

Higher loan installments as from September 14 after ECB’s interest rates hike

Loan takers will be paying higher installments as from September 14 following Thursday’s decision by the European Central Bank to raise its key interest rates by an unprecedented 75 basis points.

A few months back, the ECB also lifted its main refinancing rate to 1.25% – the highest level for both since 2011 – with moves promised for the next several meetings.

Interest rates are expected to raise further because inflation remains far too high and is likely to stay above the target for an extended period, Philenews reports.

Philenews also gives examples on what a Cypriot loan taker will be paying as from next week. Specifically, for a mortgage of €200,000 with repayment in 20 years, the installment will increase from €1,099 to €1,175. That is, an additional €936 per year.

For a loan of €300,000 the installment from €1,923 will increase to €2,056 with an additional cost of €1,596 per year.

A business loan of €200,000 with a duration of 20 years today has an installment of €1,414 and is expected to increase to €1,561. This means an extra annual charge of €1,764.

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