In Cyprus, the possibility of temporarily suspending the procedure for seizing primary housing from mortgage debtors is being discussed. This initiative was proposed by the country's largest political force — DISY. The party suggests introducing a six-month moratorium on the repossession of primary housing valued at up to 400 thousand euros.
According to politicians, the measure should become temporary protection for households that may face financial difficulties amid economic instability in the region and the rising cost of living.
Why the idea of temporary housing protection emerged
The proposal to temporarily suspend the seizure of real estate is related to concerns about the possible economic consequences of international instability. In recent years, residents of Cyprus have already faced rising interest rates on loans, increasing utility costs, and overall inflation.
DISY believes that the coming months may be difficult for many families, especially for those paying mortgages. Therefore, the authorities should take measures in advance to prevent a sharp increase in cases of housing loss. According to party representatives, such a moratorium will allow time to be gained and a more sustainable system of borrower support to be prepared.
Preparation of a new borrower protection system
The initiative is considered a temporary solution. During the 6 months, according to supporters of the project, the state should develop a full mechanism to protect people who risk losing their only home. This refers to the creation of a program with clear social criteria.
It should take into account the family's income level, the value of the property, and the real financial capabilities of borrowers. It is also planned to ensure transparent rules for access to such assistance in order to avoid abuse. Economists note that the problem of mortgage debt has remained a sensitive issue for Cyprus since the financial crisis of 2013. Since then, the state has periodically introduced various support programs for people who experience difficulties with loan repayments.
What programs have already operated in Cyprus
During the discussion of the initiative, representatives of DISY recalled previous state support mechanisms. One of the most well-known projects was the program ESTIA, which helped borrowers restructure problematic mortgage loans and partially subsidized payments.
The “Rent Against Mortgage” model was also applied, under which a borrower could continue living in the house, effectively renting it after transferring ownership to a bank or the state. Such solutions helped avoid immediate eviction and gave people time to stabilize their financial situation. According to experts, similar schemes can be adapted to current conditions as well, but taking into account new economic realities and the requirements of the banking system.
Balance between social protection and financial stability
The main task of future solutions, as noted by the party, should be maintaining a balance between social protection of citizens and the stability of the financial sector. Banks in Cyprus are gradually reducing the volume of non-performing loans, and any new measures must take this dynamic into account.
That is why the proposed moratorium is considered a temporary step that will allow the state to prepare a long-term and sustainable assistance system for borrowers.
The discussion of the initiative continues at the political level, and the final decision will depend on the position of the government and Parliament. However, the issue of protecting primary housing has once again become one of the key topics in the economic and social agenda of Cyprus.