“Decisions must be made after research, analysis and reflection”
Households and businesses should carefully study the loan agreements placed before them.
The Central Bank of Cyprus issued an announcement in relation to the upward trend in interest rates that has prevailed internationally in recent months and that has significantly increased the cost of borrowing for households and businesses. Due to this development, he urges the public as:
Before choosing the type of loan interest rate (floating or fixed), take into account the fact that the amount of interest rates does not remain static but fluctuates. Therefore, they need to fully understand the implications of the options available to them and particularly at what point in the rate rise/fall cycle they might lock in their loan, especially if they are considering fixed rate loans.
Research carefully. the loan agreements placed before them and evaluate and take into account factors such as the amount of the monthly installment throughout the life of the loan and any early repayment charges and changes in the type of interest rate.
Looks for clear and adequate explanations of all the above from the credit institutions they work with, including calculation of the total amount payable in interest under various scenarios.
Interest rates fluctuate depending on the macroeconomic conditions that prevail from time to time. That is why borrowers' decisions about the characteristics of a loan contract must be made after research, analysis and reflection.
