A government debt relief scheme for vulnerable homeowners will be officially launched in March, a senior finance ministry official said on Wednesday.
At a first stage following the announcement, banks must confirm their participation, the head of the financial stability directorate Andreas Charalambous said.
The government was also setting up an online application platform, he told the Cyprus News Agency, but those eligible in the Estia scheme can ask their banks to start preparing now.
The stated purpose of Estia is to assist, support and protect vulnerable households who have mortgaged their houses for their loans.
To be eligible, a household must have a declared gross income of €50,000, and their primary residence which is mortgaged must have a maximum market value of up to €350,000.
Charalambous said the online platform will help the banks and the labour ministry review the applications while maintaining contact.
The loans will be written down to the market value of the primary residence and then the borrower will have to pay two-thirds of the rescheduled loan every month and the taxpayer (the state) is going to subsidise one-third of the monthly instalments on that rescheduled loan.
It applies to loans (mortgages) that were classed as non-performing as at September 30, 2017. Loans designated as non-performing after that date are not eligible.
The scheme applies to the first mortgage on a residence, and covers loans or credit facilities regardless of currency.
Debts must continue to be non-performing up until the start of the application period.