April 13, 2024

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Low mortgage interest rates – up to 3% fixed for three years

Low mortgage interest rates – up to 3% fixed for three years

With new discounts in interest rates to Mortgage loans They answer Banks In the climate of conservatism found in captivity around Buying a house with a loan, in an attempt to garner the interest of potential new buyers. At the same time, for existing borrowers, the “freeze” of interest rates in place since last May has been extended until the end of the year.

Specifically, according to K’s information, the initiatives that the banks will implement relate to the following:

1. Borrowers already lock in interest rates at 2.70%-2.80%, plus the bank's margin for all loans contracted in the past at a variable interest rate. The measure was taken last May with a one-year effect and applied to all informed borrowers, who saw their loan repayments “freeze” at the May 2023 level as banks absorbed new loan increases. Euribor. The “freeze” facilitated the containment of the cost of servicing installments for about 450,000 real estate loans, totaling 19.5 billion euros, and extending the program until the end of 2024 is considered acceptable by banks. Minister of National Economy in his statements to SKAI yesterday Kostis Hatzidakis He said characteristically, “We cannot imagine that banks will not extend the low fees for housing loans, which they adopted last year, for a year.”

2. For new borrowers, banks' intervention will relate to:

i) The Fixed interest rates Long-term, i.e. from 20 to 30 years. Interest rates for this category of loans currently range between 4.60%-5.10% (depending on the bank and customer profile) and are expected to drop to around 4.30%-4.90% to become more attractive to households who choose to “lock in” their loan repayments for an extended period of time.

New long-term loans with a fixed interest rate ranging between 4.30% and 4.90%.

father Floating interest ratesIt is applied after the fixed interest rate period, for which banks are instructed to reduce the margin they apply to the Euribor rate. The spread is expected to fall to approximately 2% and given the possibility of a decline in the ECB policy rate and Euribor, this will lead to a decline in variable interest rates for the housing market.

Maximum limits have been set for home loans – up to 90% of the property value

The above measures are aimed at alleviating the cost of servicing housing loans for households and boosting demand for new housing loans, which remains weak mainly due to declining disposable income of households and rising property prices. In his statements yesterday, Mr. Hatzidakis linked the banks’ initiatives to the good image of his country Greek economy It obtained the investment grade, noting that “we must not forget that our banks have been paralyzed in the past decade, and if we do not have a sound banking system, we will not have a sound economy.” Referring to the topic of interest rates, he pointed out that “interest rates have risen across Europe and of course in Greece as well, but the difference in average European interest rates compared to Greek interest rates is smaller precisely because the economy has advanced.” And we have the investment step.”

Expensive housing, high interest rates, and weak demand for housing

Sources from the banks comment That fixed-term interest rates have fallen to historical lows and are compared to the average level of variable interest rates that were applied in our country in 2019, when the Euribor rate was negative. Today, 95% of new mortgage payments are made with fixed terms of 3, 5 or 7 years, and further reductions in interest rates for longer terms of 20 to 30 years will enhance access to new home equity loans. , and reduce uncertainty. On the development of interest rates in the future. The average mortgage term is currently around 22 years, and the interest rate if one chooses a fixed term – ie. 20 years – set at 4.60%-4.90%. Banks intend to “insure” low premiums even for 30 years, and reduce the interest rate for this category to less than 4.50%.

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This trend will make it particularly easy for them New buyersThat is, those who have not taken out a mortgage in the past, to whom banks will apply more favorable loan terms, financing up to 90% of the commercial value of the property. This measure will be implemented based on a proposal from the Council of Ministers, which encourages a relevant decision, in an attempt to support new families in meeting their housing needs.