ΤΡΑΠΕΖΑ ΠΕΙΡΑΙΩΣ
- 30 Apr 2023
- economy
Piraeus Bank, responding responsibly to the issue of the burden on family budgets from the rise in international interest rates and the broader inflationary pressures, is proceeding with the implementation of a new program to reward borrowers with up-to-date mortgage debts of variable interest rates, regardless of duration and currency.
With this program, Piraeus Bank protects consistent households from possible further future increases in the base interest rates of their housing loans (Euribor, Libor, MRO EKT etc.). In any case, the vast majority of borrowers with housing loans in Greece were and remain consistent in servicing their obligations, making an effort to adapt to the new conditions.
The program concerns informed mortgage loans of natural persons that had already been disbursed by 31.12.22 and will be put into effect from the beginning of May 2023. It foresees compounding with the base interest rates of 31.03.23, reduced by 20 percentage points and maintained at this level for 12 months from May 2023 to April 2024.
If, during the 12-month period of the program, the base interest rates are reduced by the Central Banks to levels lower than those provided for in the program, then the lower interest rate for the benefit of the customers will apply.
Depending on the base interest rate and the currency of the loan, the base interest rates of the new program will be formed respectively, plus the margin provided for in the corresponding loan contracts (including contribution of Law 128/75). For example, at Piraeus Bank, where mortgage rates are mainly based on 1-month Euribor, the base rate ceiling for informed mortgages in this category is set for 12 months at 2.72% from 2.92% as at 31.03.23 .
Corresponding adjustment of the base rates will also apply to informed mortgage loans in other currencies or with different base rates.
Individual borrowers with current variable rate mortgages will automatically join the new 12-month program, without requiring any action on their part.
As a condition of inclusion, the mortgage must be current on the date of implementation of the measure. To keep the new pricing, the loan will need to stay current for the 12 months of the new plan.
The program does not apply to fixed-rate mortgages or mortgages whose interest rate is based on the Basic Mortgage Interest Rate, as these were not affected by the increase in reference interest rates that took place in recent months.
Piraeus Bank remains alert for actions to support and reward its consistent customers, where required, based on banking criteria and best practices.
From June 1 - according to information - the "freeze" on the floating reference interest rates of housing loans will begin, which will be valid for 12 months, and concerns 400 to 500 thousand loans.
Today the banks will also announce the price at which the reference interest rate will be "locked", as it was set on March 30 or 31. This means that the interest rates of all current mortgages, whether they concern a first or second home, will operate as a fixed for 12 months.
But not only interest rates are "frozen", the demand for new housing loans has also "frozen", as mentioned by the Governor of the Bank of Greece Giannis Stournaras in his Report for 2022, as households avoid borrowing due to high interest rates and inflation, while the risk of creating new "red" loans is also visible.
