Fixed rate option on restructured loans

State-owned Cyprus asset management company Kedipes on Tuesday announced revisions in pricing for existing restructured loans.

According to a written statement, this decision arose after cumulative increases in the interest rate of the European Central Bank’s main refinancing operations (ECB Base Rate), which led to a significant increase in inflation, but also due to the wider effects on the household budget.

Under the new pricing, borrowers will now have two options. Either the introduction of a fixed rate period, which will end on December 31, 2025, or a fixed rate for the duration of the restructured loan.

Regarding the first option to introduce a fixed rate period, mortgages will have a fixed rate of 3.50 per cent, while restructurings in relation to credit facilities for other purposes will have a fixed rate of 4 per cent.

After the end of the fixed rate period, borrowers will have an interest rate equal to the current ECB Base Rate for principal refinancing operations, plus a margin, which will amount to 2 per cent for restructurings in relation to housing loans and 2.50 per cent for restructurings in relation to credit facilities for other purposes.

The option of a fixed interest rate for the life of the restructured loan is also offered. Specifically, this interest rate will amount to 4.50 per cent for housing loans and 5 per cent for other loans.

The above option will be available until the end of July.

It was noted that the above decisions do not concern account restructurings of loans that fall under any plan of the Central Agency for Equal Burden Distribution and loans that may be included in the Estia plan.

Depending on the market conditions as they develop along the way, Kedipes may end  or vary its above offers, the statement said.

Information on the above can be found on the Kedipes website at www.kedipes.com.cy