articles | 06 March 2017

Cheaper housing loans competition heats up

Credit institutions are offering attractive interest rates and extended loan repayment deadlines in an effort to reignite the housing loan market.

Two years ago, the prevailing economic uncertainty and loss of income due to salary cutbacks and job losses had negatively affected the demand for housing loans.

Today the situation is different. The economy is showing signs of rebounding and the credit institutions are offering attractive housing loan packages once more.

With interest rates ranging between 3% and 3.5%, and loan repayment deadlines up to 40 years, the banks are trying to swell up demand for housing loans and land development. In some cases the option is offered to not pay any instalments up to two years after the housing loan deal is struck.

Besides housing loans, some banks have begun advertising loans for house remodelling.

The interest rates offered today are particularly attractive when compared to the average interest rate for housing loans in the summer of 2013, a relatively high 5.6%.

Thebanks are also giving special weight to their relationship with their customers, preferring to provide loans to customers who maintain a long-term and consistent relationship with the bank.

According to data from the European Central Bank, in January 2017 housing loans increased by 21% to reach €46 million, up from €38 million in January 2016.

Source: InCyprus

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