Mortgage remains one of the most popular ways to buy property on the Island of Aphrodite.
Despite the increase in interest rates due to the additional rate hike by the European Central Bank in March 2023, both locals and foreigners are actively acquiring land, new developments, and resale properties on favorable terms. Let's talk about the differences between local banks and which one to choose. Naturally, it's best to consider institutions with which you already have some connection. For example, if you have opened an account with a local bank or used their car insurance services, any positive experience can serve as a starting point. Besides mortgage expenses, you are likely to purchase property insurance and life insurance from the same bank, so it would be useful to inquire about the prices for these services. The one-time mortgage registration fee amounts to 1% of the property price.
The most popular credit organizations in Cyprus are Bank of Cyprus, Hellenic Bank, Alpha Bank, Ancoria Bank, Eurobank of Cyprus, SGBCy Cyprus, and Housing Finance Corporate.
In general, the average down payment ranges from 20% to 40% of the total loan amount. The average interest rate is around 5%, but it can vary depending on the overall economic situation in the country and the European Central Bank's rate. Applicants must be at least 18 years old and not older than 65 years on the loan maturity date (with some exceptions). For third-country foreigners, permission from local authorities is required to purchase real estate in Cyprus. All applicants need to provide income statements for the last three months. Next, you can schedule an in-person meeting with a housing loan manager through the bank's website. Don't forget to fill out the application and register on each bank's website to save time.
Let's take a look at the most popular credit organizations on the Island of Aphrodite.
Bank of Cyprus
In the largest Cypriot bank, the most favorable loan programs are offered, especially for those who have been living and working in Cyprus for some time. The most popular bank in Cyprus covers up to 80% of the total property cost with a fixed rate for the first 3.5 years or 10 years. After the fixed payment period, the rate changes to a floating rate for the remaining loan term. Alternatively, you can choose a floating (variable) rate from the beginning. The bank has a "Home for Holidays" program with a fixed interest rate for 25 years, suitable for foreign buyers.
The maximum mortgage repayment period for amounts over 100,000 euros is 30 years, including a two-year grace period. For loans up to 100,000 euros, the rate will be 1.75% plus the Eurobank rate, totaling 4.5%. The repayment term is up to 20 years, depending on the amount and frequency of installments.
You can defer payment for up to 2 monthly installments per year (24 payments during the loan term) in case of unexpected events. The provision of payment suspension is at the discretion of the Bank and is governed by terms and conditions.
Hellenic Bank
The second most popular bank in Cyprus operates on similar terms to Bank of Cyprus. The only difference is that the actual initial down payment for foreigners increases to 50%, and the repayment term is reduced to 20 years. From time to time, the bank offers support programs for foreign buyers. The bank's programs are perfect for properties with ready Title Deeds, the main document confirming property ownership.
Alpha Bank Cyprus
This bank offers interesting credit programs with a repayment term of up to 40 years, which also includes a beneficial two-year grace period. The minimum rate on the island is 4% even for foreigners. The down payment varies from year to year, and currently, it should be no less than 70% of the property value.
It's essential to note that if your income increases, and you can afford a higher housing loan payment, you can request an increase in your down payment up to 100% without penalties. Payment adjustment options can be applied for up to a maximum period of thirty-six (36) months during the loan term.
Eurobank of Cyprus
This bank provides housing loans starting from 10,000 euros. If the down payment is more than 40% of the property value, the approximate interest rate will be 4.2-4.7%. For down payments less than 40%, the rate is around 5%. For loans starting from 100,000 euros, the repayment term is up to 30 years. There is a fee for early loan repayment, and the payment amount and total property cost may increase or decrease depending on changes in the base rate.
Ancoria Bank
The bank offers mortgage schemes for both residents and foreign investors, with loans ranging from 80% to 60% of the property's appraised value. For loans up to a thousand euros, the interest rate will be 2% (plus the floating Eurobank rate, which is currently around 3.5%), and the repayment term is approximately 35 years. From time to time, the bank offers competitive programs. You can transfer your loan if the conditions of Ancoria are more comfortable for you. Try calculating your future payment on the bank's website.
Housing Finance Corporate
Cyprus also has a network of state-owned mortgage agency HFC, supporting vulnerable segments of the population. The final mortgage rate is reduced to 2.5% instead of 6% at the popular Bank of Cyprus under the state subsidy program. EU citizens or Cypriots can use the preferential rate credit services. There are no strict requirements for monthly income, but the payment should not exceed half of the salary. In addition, the loan is provided for residential real estate priced up to 400,000 euros.
Theoretically, after obtaining citizenship, foreigners can try to transfer their loan from Bank of Cyprus to Housing Finance Corporate and pay less on the loan.
Interested in real estate on the island? Check out the number one real estate agency in Cyprus - DOM! The agency's website offers the largest database of properties in the country - over 30,000 residential and commercial properties all over the island. Choose and contact professional brokers who will help you make the right choice!
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