Mortgages

[azwad]

Hello, I am trying to find out some advice on Mortgages available in Cyprus, are they similar to mortgages in the uk, what deals can you get, what are the best/cheapest deals available, any help is greatly appreciated.

[Nigel Howarth]

Hi Azwad,

Mortgages in Cyprus, like most other places in the world, are getting more difficult to get. The banks are scrutinising loan applications very closely indeed. You'll be looking to pay interest around 10% p.a. and there are no deals available from the Commercial banks - the regulations for them are set by the Central Bank of Cyprus.

You'll need to find 40% deposit based on the bank's valuation of the property - plus your legal expenses and other costs.

I understand that housing loans dried up towards the end of last year - the situation was being reviewed at the end of December. But I've seen no announcements so far.

You may find it easier to raise the capital against the value of your current property.

But whatever you do make sure you have all your ducks lined up before entering into any contract. A number of people have contacted me who can no longer afford to keep up their mortgage repayments due to (a) the poor £/€ exchange rate and (b) the increased interest rates here in Cyprus.

Also make sure you take independent legal advice before buying.

Are you buying as an investment a holiday home or permanent home?

Regards,

[Pantheman]

Hello,

Nigel I think you 10% pa interest is a bit exagerated.

The norm is around 6.75% (and this is the raised amount) prior was ECB rate + 1.75%

No deals as such, but depending on the circumstances of each applicant, they can get onto different schemes.

As an example, if you were a 25 yo you would get a better deal than if you were a 55 yo and so on.

For permanent residence you can get upto 80% and for 2nd homes upto 70% mortgages.

Yes it is harder, but they are still loaning. At worst, you could get a loan from an overseas company secured on the property here or even in the UK.

Cheers

[LDonald101]

Good Afternoon,
I have been in touch with the Bank of Cyprus who have sent me the application for a mortgage, we were after approx 35% of the purchase price. They have quoted 5.25% at the banks base rate plus margin which begins from 2.5%. My question is, what is this margin issue? What will be the % I will actually pay? Grateful for any info. They also require life insurance from their insurance arm of the bank or another provider accepted by the bank. Does anyone know what insurance companies are accepted?
Thanks.

[Nigel Howarth]

They have quoted 5.25% at the banks base rate plus margin which begins from 2.5%. My question is, what is this margin issue? What will be the % I will actually pay? Grateful for any info.

The base rate is 5.25% and the 2.5% is the margin over the base rate that you'll have to pay. (This is no different to getting a mortgage in the UK, but only a single figure is shown). So you'll be paying 7.75%.

But I know that some banks have been changing their margin - which is just the same as having a variable mortgage in the UK.

Also bear in mind that the Land Registry will charge you 1% of the amount advanced to register the mortgage with them. This is a one-off charge).

They also require life insurance from their insurance arm of the bank or another provider accepted by the bank. Does anyone know what insurance companies are accepted?

I don't know - maybe someone else can help. Have you asked the bank?

Regards,