Until the end of 2021, the Ministry of Finance extends the Interest Rate Grant Plans for New Mortgages and New Business Loans.
Specifically, as stated by the Minister of Finance Konstantinos Petridis, the decision was taken to extend the plans until 31/12/2021.
Regarding the Mortgages, the maximum loan amount from 300,000 euros was increased to 400,000 with immediate application and the subsidy up to 24,000 euros. The subsidy remains at 4 years.
The plans, as the Minister of Finance said, have retroactive effect.
Also, the limit for business loans was increased from 800,000 euros to 1.8 million euros.
Analytically:
In order to support households, young couples and in general our fellow citizens who wish to take out a mortgage loan for home ownership purposes, it was decided:
(a) The six-month extension of the New Mortgage Interest Rate Grant Scheme from 30/06/2021 until 31/12/2021 . That is, the new deadline on which the Licensed Credit Institutions participating in the Plan can approve applications of potential borrowers for inclusion in the Plan is 31/12/2021. The implementation of the extension is effective from 17/02/2021.
(b) The increase of the maximum loan amount to € 400,000 from the current € 300,000, with immediate effect from 17/02/2021. That is, the total amount of the maximum grant now amounts to € 24,000.
The duration of the interest rate subsidy is 4 years, from the date of the 1st disbursement of the loan and the amount of the interest rate subsidy up to 1.5 percentage points.
It is clarified that those who have applied, approved and / or borrowed for a loan amount of up to € 300,000 can apply for an additional loan amount but the total loan amount does not exceed € 400,000, provided that all other provisions of the Plan are met.
Therefore, a revised New Mortgage Interest Rate Scheme will be posted.
Regarding the Interest Rate Grant Scheme for New Business Loans, it was decided:
(a) The six-month extension of the Plan from 30/06/2021 until 31/12/2021 provided that it will be approved by the European Commission, as compatible with the rules of state aid.
(b) increase lending limits for New Business Loans to self-employed persons and companies, subject to approval by the European Commission, as compatible with State aid rules, as follows:
- At € 1.8m . per self-employed person or company from € 800,000 that is today. At € 270,000 per self-employed person or company active in the fisheries and aquaculture sector from the current € 120,000. At € 225,000 per self-employed person or company active in the primary production of agricultural products from the current € 100,000.
(c) the pricing of loans granted through the European Investment Bank, the Cyprus Entrepreneurship Fund and the Pan-European Guarantee Fund may use different Euribor maturities (eg 1 month, 3, 6 or 12 months) instead of pricing with Euribor – 6 months as defined by the Plan.
The maximum interest rate subsidy will be 4 years from the date of the 1st disbursement as follows:
For the first 2 years, the interest rate will be subsidized up to 3.5 percentage points for all companies. In the third to fourth year, the interest rate will be subsidized by 2 percentage points for SMEs and 1.5 percentage points for large enterprises,
Regarding the conditions:
- The companies that will join the Plan cannot lay off more than 2% of the staff they employ on the date of approval of the Plan by the EU. without replacement (except for reasons of dismissal without notice), for a period of 6 months. The loans can not be used to cover the repayment of existing credit facilities either serviced or not. Covers loans that have been approved or will be approved from 1/3/2020 to 31/12/2021.
As of December 31, 2020, the total number of mortgages amounted to 2,237 , which concerns a total loan amount (loan agreement amount) of approximately 301 million euros and an average interest rate of 1.67%.
The total number of subsidized business loans was 339, which concerns a total loan amount (loan agreement amount) of approximately 87 million euros and an average interest rate of 2.96%.
They will exceed 1 billion.
The Minister of Finance, Konstantinos Petridis, assured that the government will use all the tools in order to support the employees and the companies in the middle of the coronavirus pandemic.
In his statements, Mr. Petridis estimated that with these increases and the extension of the application period, the total number of loans that will receive an interest rate subsidy will reach € 1 billion by the end of the year. However, he noted that final approval by the European Commission is awaited.
He also stated that by the end of December 2020, 2,337 mortgage loans totaling € 301 million with an average interest rate of 1.67% have been subsidized, while in the same period a total of 339 business loans totaling € 87 million with an average interest rate of 2.96% were subsidized.
Philenews / Insider
