The Council of Ministers of the Republic of Cyprus approved on Friday, February 19 new amendments to the programs for subsidizing interest on mortgages and business loans.
According to the statement of the Minister of Finance Konstantinos Petrides, both schemes were extended for another 6 months, until December 31, 2021.
In addition, it was decided to increase the maximum amount for which a mortgage can be taken from 350 thousand euros to 400 thousand euros.
It should be noted that those borrowers who have already approved housing loans of up to 350 thousand euros, will have the right, if necessary, to apply for a recalculation and receive an additional loan of 50 thousand euros, taking into account the new program criteria.
The government has also decided to significantly increase the maximum limit on the amount of loans issued to subsidizes the business credits:
- from EUR 800 thousand to EUR 1.8 million for companies
- from EUR 120 thousand to EUR 270 thousand for individual entrepreneurs or companies working in the fishing and aquaculture sector
- from EUR 100 thousand to EUR 225 thousand for individual entrepreneurs or companies whose activities are related to the primary production of agricultural products.
Petridis noted that the extension of the program for subsidizing interest on new business loans requires the approval of the European Commission, so the government of Cyprus has already sent it the relevant documents.
Both schemes provide a decrease in interest rates on loans for the next four years. At the same time, the first two years, interest rates will be reduced to 3.5%. And the next two years - by 2% for medium-sized businesses and by 1.5% - for large businesses.
Petridis stressed that the programs are popular with the residents of Cyprus.
By the end of December 2020, 2,337 mortgage loans were subsidized for a total of € 301 million at an average interest rate of 1.67%. During the same period, a total of 339 business loans were subsidized for a total of EUR 87 million at an average interest rate of 2.96%.
According to the Minister of Finance, thanks to the next extension of the program, the total amount of subsidized loans will reach 1 billion euros by the end of 2021.