Own Your Dream Home – Getting a Mortgage in Cyprus

own your dream home - getting a mortgage in cyprus

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:

  1. Fill out the applicable mortgage applications with the help of licensed real estate agents
  2. Examine loan amount estimates and choose a lender for your property in Cyprus
  3. Work with your agent to draft up the paperwork and pay necessary fees or deposits

Once cleared, fees paid on housing loans mean that you can begin enjoying your home in Cyprus paradise.

Requirements and Costs

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.

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.

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.

how to get a mortgage in cyprus

Other expenses included with the mortgage rates and deposits are the 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.

One of the benefits of applying and getting a mortgage in Cyprus for a property is the historically low floating interest rates, at 2.1% in 2019 and continuing to decline as a result of the Covid-19 pandemic. 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.

EU minimum deposit of 20-40%.

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
  • Alpha Bank
  • National Bank of Greece (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%),
  • VAT (19%, with exceptions),
  • 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.

New Interest Subsidy Scheme when Getting a Mortgage in Cyprus

On May 28, 2020, the government of Cyprus announced new 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.

The expansion of the new interest rates scheme for home loans makes this the perfect time to secure your future home by getting a mortgage in Cyprus.

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. They are typically also granted for 10 to 40 years depending on the age of the borrower, and not to exceed past the age of 65.

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.

Get Approved Fast with an Expert Broker

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.