Mortgage procedure in Cyprus is now a standard banking service. With the growth of investment in tourism and real estate, the number of people willing to buy property in Cyprus is increasing, and Cypriot banks have prepared various mortgage plans for non-residents.
Features of Mortgage for EU Non-residents
Initial fee from 20 to 40% of the total cost of the facility. The credit rate varies from 2.15% to 5.3%. Some banks allow non-residents to make monthly payments from abroad to avoid large transaction fees. Most mortgage schemes last from 20 to 35 years. Applications can be approved within three weeks to one month.
Claims Against Claimant and Documents
The main requirements for a mortgage applicant are age 18 to 65 and income. The applicant must have sufficient funds to cover up to 33% of the monthly mortgage payments.
The following documents should be provided together with the application:
- completed questionnaire
- bank statement of income for the last three months
- purchase and sale contract
- confirmation of prepayment for the facility
- insurance (if any)
- title of owner
- confirmation of existing mortgage (if any)
- permission from local authorities to buy real estate in Cyprus
- proof of payment of stamp duty
- credit statement for the last three years
If an individual entrepreneur applies for a mortgage, he still needs to provide:
- copy of VAT declaration
- tax return (for loans over 50,000 euros)
- social insurance (for loans over 100,000 euros)
- roof of income by an accountant (for loans over 100,000 euros)
For a legal entity:
- a copy of the last VAT declaration
- the original income tax declaration for the last two years
- the audited financial statements for the last three financial years (for loans over EUR 50,000)
- management or financial statements for the relevant quarter (for loans over EUR 50,000)
- business plan with budget-based cash transfers for the next two years (for loans over 100,000 euros)
One-time mortgage costs range from 150 to 500 euros, excluding registration fees, which amount to 1% of the loan amount. Buyers are also responsible for the annual property and life insurance payments. Premiums depend on many factors and are based on remaining debt, that is, they decrease over time.
- for real estate evaluation, Due Diligence – 100–350 euros
- for the execution of documents – 50–150 euros
- real estate insurance against fire and earthquake – 350–1200 euros per year
- borrower’s life insurance – 150-600 per year
Non-residents can apply for mortgage in Cyprus to the following credit institutions:
- Bank of Cyprus
- Hellenic Bank
- Alpha Bank
- Ancoria Bank
- EuroBank of Cyprus
- SGBCy Cyprus
- Housing Finance Corporate
Mortgage terms provided by Cyprus banks
Bank of Cyprus
The Bank of Cyprus finances up to 80% of the property value with a fixed interest rate of 3.5 years or 10 years. After a fixed interest period, the rate is changed by a variable for the entire credit term.
The maximum mortgage maturity of more than 100,000 euros is 30 years, of which two years is the grace period. For a housing loan of up to 100,000 euros the rate is 2.35% and 2.45% and the maturity is up to 20 years depending on the amount and frequency of instalments.
The amount of the housing loan covers up to 75% of the purchase price of the property for the first main residence. The credit shall be cancelled by equal monthly payments with a maximum duration of up to 40 years, including a grace period of two years. For a 100,000 euro loan, the total interest rate is 1.96%.
The bank offers a mortgage loan from 20,000 euros. The maximum maturity is 40 years. The basic interest rate is 2%.
Mortgage schemes with credit up to 60% of the estimated value of the property. For the amount of credit up to 300,000 euros interest rate 1.99, repayment term 35 years.
EuroBank of Cyprus
Mortgage loans from 10,000 EUR. The maturity depends on monthly payments and the interest rate on the loan. For a mortgage loan of EUR 100,000 with repayment up to 30 years the interest rate is set in the first year – from 4.9 to 5.5%, in other years the rate is 3.2-3.8%.
This bank offers a mortgage with an initial deposit of 20% of the value of the property. At an interest rate of 3.84-4.37% the term of payment of the mortgage is 25 years.
Housing Finance Corporate
Long-term housing loans of up to EUR 450,000 at a rate of 2.86-3.38 % for the purchase or construction of housing with a repayment period of up to 40 years. It provides loans of up to 100,000 euros for 15 years to renovate and improve the energy efficiency of homes. For the purchase of a residential plot – up to 300,000 euros for 30 years.
Non-residents are granted a mortgage with an interest rate of 3.98-4.28% for a term of up to 20 years. The minimum initial deposit is 40% of the value of the facility.
For example, let’s calculate how much the mortgage in this bank will cost:
If the value of the property is 200,000 euros and the size of the mortgage is 100,000 euros for 25 years at 2.40% per annum. Monthly payment – 444 euros.
- mortgage review – 500 euros
- customer Verification – 100 Euros
- preparation of documents – 6 euros
- mortgage on the facility – 156.5 euros
- credit fee – 1 EUR 010
- Due Diligence Real Estate – EUR 150
- life insurance for 25 years – 8 750 euros
- real estate insurance for 25 years – 4,625 euros
Total cost: EUR 15,297.5 per mortgage plus EUR 33,079 (interest amount). Total cost 48,376.5 euros.