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Mortgages for Expats in Cyprus

Author: Jim Newham
Submitted: August 2017

The mortgage market in Cyprus is well established and runs along Western lines, being particularly similar to Britain’s. Most lenders will arrange loans with expats, though the range of products they have available is somewhat limited. Most lenders only offer repayment mortgages; interest-only mortgages are only available for new builds.

Finding a Lender

The largest Cypriot banks are:

Obtaining financial backing for a house purchase in Cyprus is fairly easy but becoming more difficult. Loans are available in Euros, British Pounds, US Dollars and Swiss Francs. However, due to currency fluctuation, it is normally easier and less risky to work in the local currency. Also, loans in foreign currency have a maximum loan period of 15 years.

To help you find a good deal from a credible lender, you can ask your estate agent, or consult a mortgage broker.

Eligibility

Firstly, as an expat, you must comply with certain legal requirements before you can be considered for any mortgage application. Additionally if you are not resident in the European Economic Area, you need to be a permanent resident in Cyprus and be a first-time buyer.

Assuming you fulfil all the above requirements, there are also eligibility criteria to fulfil before you can be considered for a mortgage. These checks are linked to your ability to pay and may include debt to income ratio (typically 40%), credit scoring and proof of assets & employment. It may be a good idea to check these with several lenders as their requirements may vary somewhat.

Terms

If the lender is satisfied that you have met the above requirements, they should be ready to start negotiating mortgage deals. The amount they will be prepared to lend is normally expressed as a proportion, the loan-to-value ratio (LTV). This is the loan amount as a percentage of the total value of the property. In Cyprus, expats can expect an LTV of around 70% for local lenders, though this may rise up to 100% in some circumstances. Meanwhile, if the property is an investment, the LTV generally falls to 60%.
Note that life insurance is compulsory. The interest rate is pegged to the European Libor rate, and is currently at 2.5% above that.
Application
In addition to the mortgage application form, documents you will typically require are:

Fees for arranging a mortgage are at 1%; there is normally also a flat fee payable, of around €250.

 

 

 




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