• Obelisk Group
• Obelisk Interiors
• Obelisk Careers
• Obelisk Investment Property
• Obelisk Absolute Guides
• Obelisk Legal Services
• Obelisk Private Finance
• Obelisk Media

Spain: +34 952 820 319

UK Freephone: 0808 160 0670 | EIRE Freephone: 1800 932 514

Cyprus Increases Second Home Loan Rate

<< Go Back

Cyprus Increases Second Home Loan Rate

The Central Bank of Cyprus has increased the limit on loan-to-value mortgages for second home buyers by 10%.

A memo from the Central Bank of Cyprus to banks across the island disclosed that the deposit required to purchase a second home in Cyprus was far too high and may have a negative effect on the property market.

The loan-to-value mortgage has now risen to 70% in a bid to increase leverage possibilities and attract more property buyers to Cyprus from both the local and international investor market.

Last year, the Central Bank of Cyprus introduced the 60% loan-to-value mortgage to reduce Cyprus' exposure to the sub-prime debt crisis and stave off any problems in the future. However, in a complete u-turn, the bank has reverted back to the rates offered in 2007 with 80% loan-to-value available for local first time buyers.

Athanasios Orphanides, Governor of the Central Bank of Cyprus, comments, "We now see the speculative interest has waned, and that prices have stabilised. Market conditions have changed. Qualitative data by banks and by developers suggests there has been a tapering off of this phenomenon."

The Statistical Service revealed that construction activity in Cyprus has slowed as developers are strategically limiting the amount of stock coming onto the local market thus creating a high demand ratio.

Local developer, Marc Debieuvre, comments, "Indeed the decision to raise the LTV from 60% to 70% on second homes is a good one. The downturn from the UK market has had its impact on Cyprus, however, it is quite moderate due to the fact that Cyprus does not rely exclusively on the UK market and had taken strong protective measures in time. Increasing the LTV for second home purchase will make it possible for more buyers to afford their second home in Cyprus."

<< Go Back