Panayiotis Rougalas
President Nikos Christodoulides' efforts to support citizens through new banking measures are beginning to yield results. Meetings held in December with the CEOs of Cyprus’ two major banks, Bank of Cyprus (BoC) and Hellenic Bank (HB), appear to have sparked a tangible interest in first-home mortgage schemes.
According to sources from Kathimerini, both banks have seen increased activity in applications for mortgages aimed at first-time homebuyers. This interest follows measures announced shortly after Christodoulides and Finance Minister Makis Keravnos met with the banks’ CEOs, Panikos Nikolaou (BoC) and Michael Louis (HB).
These measures include attractive mortgage schemes offering fixed interest rates, making homeownership more accessible. Bank officials noted that many consumers, already preparing to apply for loans, are now finding the process easier due to these new options. They emphasized that the schemes offer greater flexibility and affordability for individuals or couples looking to purchase their first home.
Measures to Support Citizens
The initiatives came on the heels of a controversial AKEL proposal to impose additional taxes on banks, which failed to pass in Parliament. In response, the President took the lead in working with the banking sector to provide relief to citizens. The measures announced were designed to benefit vulnerable groups, including young couples and those seeking homes in remote or border areas.
Other initiatives include fee reductions, the establishment of new ATMs in underserved locations, and targeted housing schemes tailored to community needs.
Bank of Cyprus Confirms Growing Interest
The Director of Retail Banking at Bank of Cyprus, Theodosis Theodosiou, confirmed that demand for mortgage loans has risen since the announcement of the new products.
“The increased attractiveness of these loan programs encourages more people to move forward with buying their first home. Greater flexibility in lending conditions also makes these loans more affordable,” Theodosiou said. He added that the bank’s initiatives are designed to support households and communities striving to meet their housing needs.
Hellenic Bank Reports Positive Feedback
Andreas Assiotis, Head of Retail Banking at Hellenic Bank, expressed satisfaction with the strong response to their new housing loan schemes.
“We’re particularly pleased with the reception our program has received. Competitive pricing, added benefits like the MyHome Rewards program offering up to €2,000, and streamlined loan approval processes give us confidence that we can meet the housing needs of our customers,” Assiotis said.
Falling Interest Rates
The latest figures from the Central Bank of Cyprus show a decline in lending rates. In November 2024, consumer loan rates dropped to 6.99% from 8% in October, while home loan rates decreased to 4.50% from 4.62%.
Total new loans rose to €635.7 million in November, up from €533.8 million in October. Of these, €129.5 million were new home purchase loans, with €98.5 million classified as net new loans.
ECB Rate Cuts Expected
The momentum in loan applications could continue to grow, fueled by anticipated interest rate cuts from the European Central Bank (ECB). Reports indicate that the ECB plans four equal rate reductions in 2025, bringing rates down from 3% to 2%. The first cut is expected in January, with further reductions likely to follow at subsequent meetings.
The ECB’s actions aim to address slowing inflation and stimulate the European economy, creating a favorable environment for increased lending activity across Cyprus.
President Christodoulides’ proactive measures, coupled with banks’ willingness to collaborate, appear to be making meaningful strides in improving access to homeownership for Cyprus’ citizens.
*This article was translated from its Greek original
