A new subsidy scheme is already active and the application forms are expected to be available within the next few days.
The Cyprus government collaborated closely with banks and has created a unique program designed to aid the people who found themselves in unfortunate situation due to the rise of interest rates and it is in continuation to a previous subsidy scheme, in the continuous effort to make home loans more affordable for citizens and giving the opportunity to citizens to make the dream of house owning a reality.
The new mortgage interest rate subsidy scheme is expected to benefit the whole economy and not just the beneficiary persons since this will aid the development of new houses and will create positive expectations to both current and potential buyers.
Who are entitled to this subsidy?
This scheme is addressed only to loans that have been given for first residence for the period 01/01/2022 to 31/12/2023.
The income cap is set to €50,000 per family and the beneficiaries will receive a loan subsidy of 2% for a period of 24 months (2 years), while the type of loan (Euribor or fixed) is not a criterion for someone to become a beneficiary of the subsidy.
It is worth mentioning that any loan restructuring and/or changes in the legal agreement for a loan that was in effect prior to 2022, is not considered a new loan and therefore does not meet the prerequisites of the program.
It is unclear however, if the loans that were transferred to another bank are considered as new loans and are therefore eligible for the subsidy, provided that all the other terms are met by the applicant.
How to apply for the scheme?
The application will be made to the ministry of finance and treasury of the republic of Cyprus. The procedure is really simple and straightforward. In an effort to make life easier for citizens, it was decided that any due diligence will be handled mostly by the treasury of the Republic and the bank who owns the loan.
This means less paperwork for applicants and a faster procedure.
I received a loan in August 2023, am I entitled to this subsidy?
Any loans that have been signed between 01/01/2022 and 31/12/2023 are entitled to a 2% subsidy for a period of two years. The scheme has a retrospective effect and the subsidy is limited to a period of 24 months (2 years). This means that if the loan was made in August 2024, it will be subsidized until August 2025 provided that the eligibility criteria are met.
Are all applicants who meet the criteria, eligible for the subsidy?
The ministry of finance has set a budget of 33 million Euros for the needs of this scheme. This number is not usually final, and its mainly estimations that will help the treasury of the republic to prepare the plan for the financial year. This means that the number could be revised if the interest and needs of the eligible applicants exceed the budget. Nevertheless, it is highly recommended to apply as soon as possible and not take any chances.