Getting a mortgage in Cyprus as a citizen or a foreigner is easy with new policies that make home ownership both possible and affordable. The mortgage market is similar to other European countries and has a positive approval rate for most applications.
Find out about the requirements, costs, and process of getting a mortgage in Cyprus for both locals and foreigners with Property Experts Cyprus. Achieving your dream of owning a home is just a few short steps away!
Homeownership Made Possible
Investing in real estate is one way to enjoy the splendors of Cyprus and invest in a legacy for your future. You might have already discovered your perfect home on the island and now wondering how to finance the property to maximize the advantages of your real estate investment.
Let’s take a look at what you should expect when getting a mortgage in Cyprus and relax knowing that the process and costs won’t hold you back.
The Process
Did you know it only takes three simple steps when getting a mortgage in Cyprus?
The process for both locals and foreigners is:
- Examine loan amount estimates and choose a lender for your property in Cyprus
- Fill out the applicable mortgage applications, for example, with help of the specialists at Property Experts Cyprus
- Work with your agent to draft up the paperwork and pay the necessary fees or deposits for your new home
Once cleared, fees paid on housing loans mean that you can begin enjoying your home in Cyprus paradise.
Mortgage Requirements in Cyprus
Here is an overview of the general requirements of getting a mortgage in Cyprus.
1. Own Contribution
For locals and European permanent residents, getting a mortgage in Cyprus usually means obtaining a rate of 70-80% of the property value, although some may qualify for up to 100%. For homeowners from the EU, the minimum deposit is roughly 20-40% of the immovable property value.
2. Home Value Appraisal
It is important to remember that most banks will require a home-value appraisal of the property for the mortgage application and not the purchase price to determine the mortgage rates. The specialists at Property Experts Cyprus can assist you with this.
3. Loan Duration and Maximum Age
Home loan terms are set for 10 to 40 years depending on the age of the borrower, and not to exceed past the age of 65.
4. Documents for Loan Application
Make sure to have the following information and supporting documents at hand to ensure a smooth mortgage application process:
Identification
- ID card or passport
- Proof of permanent residence (e.g. recent utility bill)
Proof of income
- Employees: payslips from the last three months
- Business owners/self-employed: income tax form, social insurance statements, last audits (Ltd. companies), other proof of income
Information on property to be mortgaged/financed
- Title deed
- Planning permit or certificate from an architect
- Building permit
- Timetable and cost analysis signed by a professional
- Property valuation
Mortgage Costs in Cyprus
Here is an overview of the general requirements of getting a mortgage in Cyprus.
1. Bank Fees
Other expenses included with the mortgage rates and deposits are KYC (Know Your Customer to verify legitimacy of applicant, source of own funds, etc.) expenses, arrangement fees by the bank to process the housing loans. Although these vary by bank, the fees paid average between 0.75-1.0%.
Further, there is typically a flat fee imposed that roughly amounts to 250 Euros.
2. Interest Rates
One of the benefits of applying for and getting a mortgage in Cyprus for a property is the historically low floating interest rates, at 2.1% in 2020 (while since 2021 the interest rates have been rising, they are still low to date).
In fact, a new home loan interest rate subsidy scheme discussed later in this article, was extended to help boost the real estate market in Cyprus and encourage the purchase of property around the island.
Your installment and interest rate typically depend on
- the loan duration
- your own contribution
- the total loan amount
- your residency status
Residency Status
When applying for a loan, banks typically differentiate between a temporary and permanent residency status of applicants:
- temporary residents/less than 5 years in Cyprus: are treated as foreigners by banks with higher interest rates
- permanent residents(expats)/more than 5 years in Cyprus: are treated as local Cypriots by banks with lower interest rates (approx. 1%-1.5% lower at present compared to foreigners)
3. Mortgage Insurance
Consider getting mortgage insurance to protect yourself against potential defaults due to unforeseen circumstances.
Now, let’s take a look at the property-related costs when purchasing real estate.
Property Purchase Costs in Cyprus
After the purchase contracts and fees are paid to the land registry, new homeowners can apply to lenders for a home mortgage. Lenders then provide the loan-to-value (LTV) ratio, which depicts the percentage of the mortgage in relation to the total value of the property.
Other costs associated with the purchase price of a home include:
- transfer tax (3%-8%, with exceptions)
- VAT (19%, reductions may apply) – for newly built homes, only 5% VAT apply to the first 200m²
- legal fees (0.10%-1%)
- stamp duty (0.15%-0.20%)
Read more about the breakdown of these taxes and fees for buying a property in Cyprus as well as a general Cyprus tax overview here.
Mortgage Features for Foreigners
Expat foreigners also qualify for getting a mortgage in Cyprus if they are permanent residents of Cyprus and first-time buyers. These mortgage rates usually cover 300,000-500,000 Euros and not more than 30-33% of a borrower’s income.
It is important to remember that most banks will only issue housing loans to foreigners for residency purposes. Buy-to-rent mortgages are not available to foreigners and many bank lenders require foreigners to declare a property in Cyprus not for commercial use as part of the mortgage application.
While banks may provide mortgage rates in different currencies, the fluctuation in currency makes it more suitable to work in local currency if possible.
Foreigners can also expect to put 30-40% down as a deposit on the purchase price of a home in Cyprus to satisfy the mortgage requirements.
Other factors for approval include:
- Debt-to-income ratio
- Ability to pay
- Credit scoring
- Proof of assets and employment
The floating interest rate for foreign borrowers is around 4.5-5%, although certain groups may qualify for a reduced rate with the lender or the government’s new subsidy program when getting a mortgage in Cyprus.
Expats will need to work with a licensed real estate agent to prepare and submit mortgage applications to the banks.
Largest Banks in Cyprus
For permanent residents interested in getting a mortgage in Cyprus, most options are financed with the help of real estate agents at the largest banks in the country.
These are:
- Bank of Cyprus
- Hellenic Bank
- RCB Bank
- Alpha Bank
- AstroBank
Let’s take a closer look at them when buying your first home.
Varying conditions of holiday homes and investment properties typically apply.
1. Bank of Cyprus
Established in 1899 and with its headquarters in Nicosia, the Bank of Cyprus is the oldest bank on the island. It has more than 100 branches across Cyprus and is the most popular bank on the island with more than 80% of Cypriots having a Bank of Cyprus account. It is also the bank of choice for businesses (60%).
In terms of mortgages, the Bank of Cyprus offers the following conditions for financing the first home:
- finance amount up to 80% of the value of the property
- repayment period 10-35 years
- variable or fixed interest rate for 3, 5, or 10 years
- no initial bank charges
- digital application possible
- no early loan repayment fees
- withdrawal right five business days from date of conclusion
Keep in mind that
- the borrower’s maximum age at loan maturity is 65 years
- Conditions for buying investment properties
- Conditions for purchasing holiday homes
Calculate your indicative installment and contact the Bank of Cyprus here.
2. Hellenic Bank
Founded in 1976, the Hellenic Bank has its headquarters in Nicosia and offers more than 70 branches across the island.
In terms of property mortgages, the Hellenic offers the following conditions to finance one’s first property:
- finance amount up to 80% of the property value
- maximum repayment period up to 35 years
- variable or fixed interest rate
- no initial bank charges
- no early loan repayment fees
- withdrawal right five business days from entering a loan agreement
Keep in mind that
- the borrower’s maximum age at the end of the loan is 65 years
Pre-calculate your installment and contact the Hellenic Bank here.
3. RCB Bank
Founded in 1995, the RCB Bank (formerly Russian Commercial Bank) has its headquarters in Limassol.
Regarding mortgages, RCB Bank offers the following conditions for financing the first property:
- finance amount of property value depends on your personal situation
- maximum repayment period 15-35 years
- variable or fixed interest rate
- no initial bank fees
- no early loan repayment fees
- withdrawal right depends on your personal situation
Keep in mind that
- the borrower’s maximum age depends on your personal situation
Understand your perspective installments and contact the RCB Bank here.
4. Alpha Bank
Founded in 1879, Alpha Bank is a Greek finance institute with subsidiaries in Cyprus and other countries. Overall, Alpha Bank Cyprus Ltd. has 22 branches across Cyprus.
Regarding mortgages, Alpha Bank offers the following conditions for the purchase of first homes:
- finance amount up to 80% of the property value of the first main residence (up to 70% of the property’s purchase value for the second property)
- repayment period up to 40 years
- floating interest rates
- digital application possible
- withdrawal right five working days from signing the loan agreement
Keep in mind that
- the borrower’s maximum age at loan maturity is 70 years
- initial bank fees may apply
- early loan repayment fees may apply
Estimate your installments and contact AstroBank here.
5. AstroBank
Established in 2008, AstroBank operates under the supervision of the Central Bank of Cyprus. The bank has 14 branches across Cyprus and is well-established in the local market.
In terms of mortgages, the AstroBank offers the following conditions for financing the first home:
- finance amount up to 80% of the value of the property
- interest rates start from 1.80%
- repayment period up to 40 years
- variable or fixed interest rate
- initial bank charge: 0.50% of the loan amount
- digital application possible
- no early loan repayment fees
- withdrawal right (for details contact AstroBank)
Keep in mind that
- the borrower’s maximum age at loan maturity is 65 years
Pre-calculate your installment and contact the AstroBank.
Finally, let’s take a look at the largest banks in Cyprus in comparison for getting a mortgage.
Comparison
To sum it up, let’s compare the mortgage requirements of Cyprus’ largest banks when purchasing the first home below.
| Bank | Bank of Cyprus | Hellenic Bank | RCB Bank | Alpha Bank | AstroBank |
| Max. finance value of property | 80% | 80% | depends on your situation – contact RCB Bank | 80% | 80% |
| Repayment period | 10-35 years | max. 30 years | 10-35 years | max. 40 years | max. 40 years |
| Variable or fixed interest rate | both options | both options | both options | variable | both options |
| Max. age at loan maturity | 65 years | 65 years | depends on your situation – contact RCB Bank | 70 years | 65 years |
| Initial bank fees | no | no | no | yes | 0.50% of the loan amount |
| Early loan repayment fees | no | no | no | yes | no |
| Digital application | yes | no | yes | yes | yes |
| Withdrawal rights after loan agreement | 5 business days | 5 business days | depends on your situation – contact RCB Bank | 5 working days | yes, for details contact AstroBank |
In case you are seeking alternative loan options, we would like to introduce the following to you.
Additional Loan Options
Besides loaning money from a bank, you can always consider other local options like credit unions, finance companies, Government agencies, credit cards, and investment accounts.
Please remember to do your due diligence regarding authenticity, and carefully consider the terms and conditions for a potential loan.
Additionally, you may also consider borrowing money via
- Lombard credits: lending via brokers (e.g. interactive brokers) against securities (e.g. stocks, life insurance policies); this asset-backed lending has low risks
- Foreign banks: requires solid securities; may be more difficult to get approval; potential lower interest rates
- Crypto lending: centralized/decentralized finance services; typically below 10% interest rates; higher risk of default (high volatility of crypto assets); popular example Nexo
Next, let’s take a look at the new Cypriot interest subsidy scheme.
Interest Subsidy Schemes when Getting a Mortgage in Cyprus
On May 28, 2020, the government of Cyprus announced measures to support businesses and homeowners throughout the Covid-19 pandemic as well as protect Cypriot banks’ 29.6% portfolios backed by mortgages. One measure provided relief through mortgage interest rate subsidies to tackle the current challenges of the market.
The scheme introduced a government subsidy of interest for 4 years and provided up to 1.4% of interest subsidy relief. The amount of the subsidy was not to exceed loans over 300,000 Euros and was applicable to new home loans between 1 March 2020 and 31 December 31 2020 so long as the new loans did not repay others.
However, Konstantinos Petrides, the Finance Minister, announced the extension of this scheme until the end of 2021 and raised the maximum loan amount to 400,000 Euros. Those that had already applied for the subsidy under the 300,000 Euro minimum may reapply for the increased loan amount.
Government initiatives to stimulate the economy, e.g. through more attractive loan options, are implemented from time to time.
Getting a Mortgage in Cyprus – The Takeaway
Whether you see yourself at home in the cultural centers of Cyprus cities or taking in the views of the pristine beaches, getting a mortgage in Cyprus ensures that your financial future is as crystal clear as the Mediterranean waters.
With a variety of excellent lending options for locals, EU residents, and foreign nationals alike, home loans help secure your investment at an affordable price.
Talk with the licensed professionals at Property Experts Cyprus to prepare everything you need when getting a mortgage in Cyprus quickly and properly. Get the best when it comes to mortgage rates with our quality real estate agents.
