A mortgage is one of the most popular ways to buy property in Cyprus.
Cypriot banks are happy to lend for both purchase and construction projects. And the government often offers assistance and incentives to buyers. As a result, many residents of the island prefer to invest their money in property in Cyprus.
On Wednesday, 30 October, a regular meeting of the Cabinet of Ministers was held, during which it was decided to resume the subsidisation of interest rates on housing loans for the population of the island state. The programme will cover all loans issued between 1 January 2022 and 31 December 2023. The government subsidy will cover 2% of the mortgage rate. The scheme is aimed at families with an annual income of €50,000 or less. The initiative will be supervised by the Cypriot Ministry of Finance. The total budget of the scheme will be around €33 million.
It should be recalled that the government programme to subsidise mortgage interest payments in Cyprus started for the first time in the summer of 2020.
At that time, the effect of the government plan applied to loans contracted between 1 March and 31 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 the punctuality of the 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.
