Bad news for those who took out mortgages and business loans through the two interest rate subsidy schemes that were part of the government’s May 2020 emergency package of measures.
These subsidized loans aimed at supporting the economy to cope with the coronavirus pandemic’s consequences. But those with a floating rate and directly linked to Euribor now make it harder and harder for borrowers to cope with the installments.
Nonetheless, the Ministry of Finance on Friday issued a circular in which it explicitly said that “any variation in the base rate automatically places the loan out of the plan”.
It specifically said: “…the Ministry of Finance is taking into account the significant increase observed in recent months in Euribor, which is used as the base rate for mortgage and business loans under the subsidy plan. This has resulted in an increase in the overall interest rates on these loans and consequently in the monthly instalments that customers have to pay. (Also) taken into account is information received from banks participating in the two plans that a large number of customers, both individuals and companies, have approached them asking for a different interest rate.”
That is when it is underlined in the circular that borrowers are not given any option to restructure their loan and transfer to a fixed-rate plan offered by the banks.
On the contrary, it is stressed that any differentiation of the base rate (Euribor) automatically puts the loan out of the plan. That is, the state subsidy is automatically cut.
