Mortgages in Cyprus are one of the most popular ways to purchase housing and commercial real estate on the island.
At the same time, Cypriot banks are willing to give loans for the purchase and construction projects, offering low bank interest rate. And the Cyprus government often provides assistance and incentives to buyers. That is why many of the island's residents prefer to invest their money in Cyprus property.
According to data provided by the Ministry of Finance, government home loan subsidies gave an excellent boost to the Cyprus mortgage market.
As of December 31, 2020, the total number of mortgage loans under the interest subsidy program was 2,237 and the amount was EUR 301 million, an average interest rate was 1.67%.
According to the latest data from the Central Bank of Cyprus, net new home loans rose to € 375.7 million between July and November 2020, up from € 346.3 million in the same period in 2019.
By the way, after the launch of the state program of subsidizing bank rates, the interest of local borrowers in mortgage loans has increased sharply. Moreover, there is no doubt that this trend will continue in 2021.
As you may know, the state program of subsidizing mortgage interest payments was launched in Cyprus in the summer of 2020.
For the first time, the state plan applied to loans taken from March 1 to December 31, 2020. However, due to the unprecedented popularity of the local population, in November 2020, the Cypriot government announced its extension for another six months, until March 31, 2021.
It should be noted that the main conditions for obtaining a state subsidy are that a housing loan must not exceed 300 thousand euros, the mortgage rate must be less than 2.3%, and the mortgage must be issued after March 1, 2020. The subsidy is issued for 4 years and covers up to 1.5% of the mortgage rate.
It's worth mentioning that in October and November 2020, mortgage rates fell to 2.14% and 2.10%, respectively.
At the same time, the government announced that the cost of subsidizing housing loan rates in the budget for 2021 is planned at about 45 million euros, and the total amount of mortgage reaches 730 million euros. This corresponds to the indicator of loans in 2019 in terms of ten months of 2020, in which the first part of the program was in effect (March-December).
Cooperation with a Cypriot bank is an excellent opportunity to take out a mortgage in the most profitable way. Moreover, often it is more practical to buy housing in Cyprus on credit than to rent real estate.