Restart housing loan with interest subsidy

For your fist home

  • Interest rate subsidy of 1,50%

    There is an interest rate subsidy of 1,50% by the State for a period of 4 years.

  • Financing amount up to €400,000

    Financing is provided for up to 80% of the value of the property intended for self-occupation, where permanent residents of Cyprus are concerned; for non-permanent residents, financing is provided for up to 70% of the property value. Maximum financing cannot exceed €400,000 in any case.

  • Suspension of loan instalments

    You can postpone payment of up to 2 monthly installments per year (24 instalments for the duration of the loan) should something unexpected comes up. The granting of the installment suspension is at the discretion of the Bank and is subject to terms and conditions.

More information

  • Permanent as well as non-permanent residents of Cyprus who meet the conditions cited below.

  • Those eligible must produce documentation from the Tax Department certifying that their tax arrears and any amounts due to the Republic of Cyprus are either settled or in the process of being settled.

  • Housing loans for which the interest is subsidised through other government schemes are exempt.

  • A floating interest rate applies for the duration of the loan, as follows:

    • Contribution =<35% - Euribor 6m +2,25%APR: 2.45% (as per note 1)
    • Contribution >35% - Euribor 6m +2,20% APR: 2.40%.(as per note 2)

     

    Notes:

    1.  The APR is calculated for a loan of €100,000 and a 20-year repayment period with 240 monthly instalments of €517.86 each, without initial bank charges. The APR is calculated to include €1621.89 expenses which relate to stamps duties for the financing documents, valuation fees and a mortgage registration fee (1%) paid to the Department of Lands and Surveys. The total amount payable is €125,891.19.

    2.  The APR is calculated for a loan of €100,000 and a 20-year repayment period with 240 monthly instalments of €515.46 each, without initial bank charges. The APR is calculated to include €1621.89 in expenses which relate to stamps duties for the financing documents, valuation fees and a mortgage registration fee (1%) paid to the Department of Lands and Surveys. The total amount payable is €125,315.92.

  • Other anticipated expenses for the borrower not included in the APR, are the borrower's life insurance and fire insurance on the mortgaged property. The calculation of the APR took into account that the client will produce a life insurance and fire insurance, which will be assigned, and the property will be mortgaged to the Bank.

  • There is an option for grace period of:

    • up to 12 months on the principal,
    • up to 24 months on the principal or on the principal and the interest, if your home is under construction.
  • There are no initial bank charges.

  • You may withdraw within 5 working days from the date of entering into the agreement.

    • Minimum 10 years.
    • Maximum 35 years.
  • The borrower must be no more than 65 years old at the loan maturity.

  • What options are there regarding interest rates?

    For some loans you can select a floating interest rate or a fixed rate for a specific time period.

    If you select a fixed interest rate, the interest rate will remain fixed for the specified period agreed with the Bank (e.g. 5 years). It will not change under any circumstances, so your installment remains constant. At the end of the fixed interest rate period, loans are converted into variable rate loans.

    If you choose a floating rate loan, then the interest rate can be changed at any time (upward or downward). The variable interest rate consists of the base plus margin. Every time the total interest rate changes, your loan installment will also change.

    What are the initial fees?

    Some loans may bear initial fees, payable upon the granting of the loan.

    Initial bank fees

    • Arrangement fees: these relate to the Bank’s costs for preparing and evaluating your application.
    • Documentation fees: a fixed charge for the preparation of loan documents,; the charge is determined by the loan amount.

     Government fees

    These fees are regulated by law as follows:

    • Mortgage registration fees paid to the Land Registry.
    • Fees relating to stamping the loan documents and paid to the Commissioner of Taxation.
    • Fees paid to the Land Registry in cases where the transfer of property from one owner to another is necessary.

     

    Fees paid to third parties

    These are fees related to valuations carried out on behalf of the Bank by approved valuers for mortgaged property, or fees related to life and/or home insurance.

    Find out about all Bank fees from the Table of Commissions and Charges

     

    What do I need to know about loan installment payments?

    • You can provide instructions in writing, so that your installment is paid automatically from your current account.
    • You can pay your installments as determined by the terms of your loan. Please make sure to designate a date that is convenient for you. Should this date change, you need to promptly  contact your personal banker.
    • Delayed installment payments incur additional costs, increasing the cost of your loan.
    • Should your financial circumstances change and you are unable to keep up with installment payments per the terms of your contract, please get in touch promptly with your personal banker in order to agree a new repayment schedule adapted to your new circumstances.

     

    What happens if I pay off my loan/installments early?

    Where a loan is paid off early, or installments are paid early in relation to the agreed schedule, the Bank will charge costs depending on the type of interest rate and the amount that was paid off early.

    What is the Annual Percentage Rate (APR)?

    The Annual Percentage Rate (APR) is the total cost of the loan to the consumer, expressed as an annual percentage on the loan amount. The APR includes all loan expenses paid by the client to either the Bank or to third parties (e.g. government fees, valuation expenses, insurance etc).

    The APR is considered to be the best tool as it includes all loan expenses. It helps you form a complete picture and to compare the Bank’s schemes with the schemes of other banks.

     

Please be advised:

The Bank reserves the right to deny any application at its sole discretion. Charges apply for early loan repayment. You may lose your home if you do not adhere to the repayment plan. Where a floating interest rate applies, the instalment amount and the total cost of the loan may increase or decrease depending on interest rate fluctuations.

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