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Mortgages in Cyprus - Investor Loans in Euros

At the start of the property boom most purchases by British buyers were funded through cash or UK lenders, rather than those in Cyprus; investor mortgages, though, soon became popular.

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During the Property Boom in Cyprus, Investor Financing was common

 
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Indeed, by 2005 the short-term 'mortgage' had become the accepted means of funding investmens in Cyprus.

And while at first glance its comparatively high interest rate might make this approach seem uneconomical, the optional capital grace period of up to 24 months made it an ideal vehicle for the growing number of property flipping investments popular on the island at that time.

 

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Investor Loans
Bridging Loans
Buy-to-Let Mortgages in Cyprus

This type of loan still exists, but the Cypriot property flipping market has long-since collapsed

Short-Term Investor Loans

CURRENCY Euro (€)
LOAN AMOUNT Minimum amount: the equivalent of €20,000.
REPAYMENT PERIOD 10 - 25 years, or until the customer's 70th birthday
REPAYMENT METHOD Monthly installments via Standing Order
CAPITAL REPAYMENT GRACE PERIOD (optional)

Up to 2 years
(6, 12, 18, or 24 months)
Interest is paid monthly

CUSTOMER CONTRIBUTION Minimum contribution 20% of the property's value
INTEREST RATE Base Rate + 2.25%
CHARGES → €20,00 Documentation Fees
→ 0,20% Lump sum upon approval of the loan for arrangement fees
→ 0,20% Foreign Client Administrative Fee (wherever applicable)
APR (For loan amount €150,000, 20 years repayment period, no grace period)
5.47%
 

Investor Bridging Loans

CURRENCY Euro (€)
LOAN AMOUNT Minimum €20,000. Up to 80% of the Force Sale Value of the property which secures the loan
REPAYMENT PERIOD 12 months
REPAYMENT METHOD Interest: monthly Capital: bullet payment at the end of the period.
CAPITAL REPAYMENT GRACE PERIOD (optional) 11 months - Loan can be repaid anytime within a year, no early payment charges
CUSTOMER CONTRIBUTION Loan secured against customer's own property
INTEREST RATE Base Rate + 3,00%
CHARGES → 0,50% Arrangement fees upon approval of the loan
→ 0,20% Foreign Administrative Fee (where applicable)
APR (Loan amount €100,000, 12 month repayment period, assuming Euribor at 0.97%, no grace period.
6.72%
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In Cyprus, property flipping schemes brought many investors to the brink of ruination.

We tell you what others don't...

Between 2005 and the spectacular collapse of the global economy in 2008, there was an explosion of property flipping schemes on the housing market of Cyprus. Investor cartels would buy entire apartment complexes off-plan with the help of short-term financing, and then resell them to individual buyers by the time they were built.

Indeed, during this time, the British mass-media was touting the Republic of Cyprus as a veritable investor's paradise, with tales of potential growth exceeding 20% per annum. Combined with the increasing number of large overseas property companies heavily advertising Cypriot holiday homes as the pinnacle of sun-soaked investments, this led to a veritable stampede of small investors releasing equity from their properties in the UK, and flocking to Cyprus in search of huge returns.

But it also led to artificial price increases on the Cypriot housing market, as the aforementioned overseas real estate giants would charge up to 15% commission to sell homes already bought through high-interest, short-term finance by property-flipping investment consortiums. This [at best] semi-ethical state of affairs continued unchecked until the global economy experienced a sudden cooling in 2008.

The stream of ready buyers heading to Cyprus for the perfect investments dried up practically overnight, as the British mass-media abounded with tales of financial woe, and the public tightened their belts and settled in for an extended economic downturn. Within weeks, the majority of large-scale overseas real estate companies in the UK went into receivership, and property-flipping investment co-operatives were left wondering exactly how they were going to repay their loans without anyone willing to buy their overpriced apartment and villa complexes.

The rest, as they say, is history, and property flipping on the Cypriot housing market is thankfully a thing of the past, despite the fact that the investor loan remains on offer, almost as a reminder of times gone by.

It's worth mentioning that Aphrodite was never part of any flipping schemes; nor were we ever one of the agencies charging extortionate commissions and thus artificially inflating real estate prices in Cyprus.

That's why we're still here, and others aren't.

We don't just want to sell you a property.
We make sure you're safe, satisfied and informed.

Contact Aphrodite

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Want to live in Cyprus?

While there are a great many estate agents on the Internet telling you what a great idea moving to Cyprus is, none of them actually give you an accurate idea of what living in Cyprus is really like.

With tantalizing promises of an easy life in the Cypriot sun, and with patently outdated claims, these agencies are painting a picture of life in the Republic which is simply not accurate enough for you to make an informed decision about whether a move to Aphrodite's Isle is right for you.
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Disclaimer. Please note that the loans and rates quoted on this website are displayed as guidelines only. They constitute neither an offer nor contract, nor part of same. E&OE

 

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