The European Commission's Directorate General for Competition has approved Cyprus to implement a scheme to subsidize interest on mortgage loans issued from January 1, 2022 to December 31, 2023.
According to government spokesman Konstantinos Letymbiotis, the regulator determined that the plan under consideration does not provide for state financial assistance to either the credit institutions that will participate in the program or to the individuals who are the ultimate beneficiaries. Hence, there does not impede the launch of the scheme.
He added that the long-awaited positive response from the Directorate General of Competition paves the way for the implementation of a very important plan that will ease the financial burden on hundreds of Cypriot families. Letimbiotis added that taking targeted and meaningful measures to support households is at the heart of the new Cypriot government's policy.
He also stressed that the Ministry of Finance will immediately start the next steps, which include informing credit institutions, signing the relevant cooperation agreements, defining the process of reviewing and approving applications, and implementing them as soon as possible.
It should be noted that the beneficiaries of the plan are households with an annual family income of up to 50 thousand euros, who have taken a housing loan of up to 400 thousand euros in the period from January 1, 2022, to December 31, 2023.
One of the main criteria for participation in the new program is timely monthly payments. The subsidy is expected to cover 50% of the increase in the interest rate between the date of the loan agreement and the date when payments start. However, the maximum amount cannot exceed 2 percentage points.
The annual financial cost of the scheme is estimated at €20 million.