As part of the state programme to subsidise interest rates on new mortgages and business loans, €7.4 million was made available to Cypriots. This was announced on Monday, 14 July at a parliamentary meeting by Andreas Antoniadou, a representative of the Chief Accountant's Office of Cyprus. According to the presented data, €5,567,956 was allocated to subsidise mortgage loans, while €1,778,093 was allocated to support business loans. These measures were intended to mitigate the impact of inflation and rising interest rates on households and businesses.
The HOME programme provides assistance to borrowers with problem housing loans
Under a separate support scheme implemented by the Ministry of Finance and the General Accounting Office of Cyprus, the HOME programme has completed the assessment of all applications, including the second phase. The programme aims to restructure or fully repay overdue housing loans granted under government schemes or on special terms.
Of the 616 applications, 533 were approved. These cover 659 loans out of 770.
The state will pay a total of €21,445,317 to the Housing Finance Corporation (HFC), excluding additional interest until all procedures are completed. €15.3 million will be allocated to loan restructuring, with the state providing more than €14 million and the HFC providing the remainder. A further €8.77 million has been earmarked for the full repayment of certain loans, with the state contributing €7.38 million. Payments will not begin until after the final implementation of the decisions on each loan, which is expected to be completed by June 2025.
Income-based mortgage subsidy programme
At the same time, another socially oriented initiative is being implemented: a programme to subsidise interest on mortgage loans based on borrowers' income. By 31 March 2025, 609 applications had been submitted. These are currently being assessed by the Ministry of Labour and the General Accounting Office.
The programme provides a subsidy of up to 50% of the difference between the increased and original interest rates, up to a maximum of 2%, as fixed at the time of signing the loan agreement. The subsidy is granted for two years and applies to mortgages issued between 1 January 2022 and 31 December 2023.
Conditions for participation:
- The maximum loan amount is €400,000.
- The borrower must be an individual with a variable-rate mortgage.
- The agreement must not relate to the refinancing of a previous loan.
- The annual family income must not exceed €50,000.
- All tax obligations must be settled by 2023.
The total budget for this programme is approximately €33 million.
Government initiatives implemented in Cyprus demonstrate the authorities' commitment to mitigating the impact of economic instability on the population. The HOME programme and interest subsidies on new mortgages form part of a strategic plan to stabilise the housing market and provide social protection for low- and middle-income families.