Mortgages for British buyers in Cyprus have become available since 2023. With relatively high interest rates at the time of writing they may not suit everyone but here are the key FAQs, as provided by mortgage broker Chris Eracleous.
What is the maximum loan to value (LTV)?
LTV’s can be as high as 70%, however, the interest rates are very high with these products. Generally, brokers advise clients to be within the 50%-60% LTV. This drops the interest rates considerably and also minimises the risk of a declined decision due to valuation discrepancies.
What terms can be offered?
First and foremost, all mortgage products are capital and interest repayment. Interest- only products are not available in Cyprus and not likely to be offered in the future either. Non-residents can borrow over 20 years or up to the age of 65, whichever comes first.
Is there a minimum amount you can borrow?
This depends greatly on the lender, but generally the lowest is approximately €50,000.
What are the current interest rates?
Current interest rates vary between 3.9% - 7.5% depending on the lender and the client’s profile. Product types vary from variable deals to fixed deals from 3 –10 years.
All mortgages are only offered in Euros.
What are the arrangement fees/taxes to pay?
- Bank arrangement fee – approximately 1% of loan amount.
- Valuation fees – average €400, depending on value of the property.
- Mortgage stamp duties – 0.1% - 0.2% of loan amount.
- Mortgage registration fee – 1% of loan amount (paid to land registry).
How is affordability assessed?
Affordability is assessed on disposable income. Some lenders calculate disposable income as 30% of gross monthly income less any other financial commitments. Other lenders calculation is based on 60% net. For example, if you have a monthly income of €3,500: 30% of this amount is €1,050 and you have an existing mortgage of €500 per month, your new mortgage must not exceed €550 per month.
What documents are required for a mortgage application?
- Colour copy of valid passport - must be valid for a minimum 6 months.
- Proof of address - utility bill no older than 3 months from date of issue.
- If employed - 12 month's payslips.
- If employed - P60 for last 3 years or tax certificate depending on country.
- If self-employed - last 3 years set of accounts/income tax returns.
- 12 month's bank statements (evidencing income).
- Proof of source of funds - 12 months bank statements if in a different account.
- Credit report - Equifax/Experian or another creditable equivalent.
- If you are currently renting - copy of your rental agreement.
- Copy of your CV.
- Copy of your residency permit.
- Draft copy of contract of sale - this can be submitted after application.
- If available - copy of the property title deed.
- In case of company owner/director the lender may ask for additional company documentation to prove profitability and sustainability.