On Thursday 27th of February, the Cypriot Finance Ministry announced that more residents of the island state will be able to receive mortgage interest subsidies.
It was decided to extend the scheme by one month, until 31 March 2025.
It should be recalled that the main purpose of the scheme is to provide financial support to households that have taken out loans for the acquisition of residential property between 1 January 2022 and 31 December 2023. The government subsidy covers a percentage of the mortgage rate. The scheme is aimed at households with an annual income of €50,000 or less. The Cypriot Ministry of Finance is responsible for overseeing the initiative. The total budget of the scheme is €33 million.
To benefit from the scheme, applicants must apply to one of the Citizens' Service Centres in Cyprus (KEP), after completing an application form on the website of the General Treasury.
The government programme to subsidise mortgage interest payments was first introduced in Cyprus in the summer of 2020.
At that time, the government plan applied to loans contracted between 1st of March and 31st of December 2020. Due to its unprecedented popularity among the local population, the Cypriot government announced its extension until the end of 2021. It should be noted that the main conditions for receiving the government subsidy were that the housing loan should not exceed EUR 300,000 and the mortgage rate should not exceed 2.3%. The subsidy was granted for 4 years and covered up to 1.5% of the mortgage rate.
This time, the beneficiaries of the plan are households with an annual family income of up to 50 thousand euros who have taken out a housing loan of up to 400 thousand euros between 1 January 2022 and 31 December 2023.
One of the main criteria for participation in the new scheme is that monthly payments are made on time. The subsidy covers a percentage of the average interest rate increase. The increase is calculated based on the initial rate in force when the contract was signed. The subsidy cannot exceed two percentage points of the interest rate.