The four largest banks in Greece bear interest rate increases mortgages for one year starting in May to help households cope with rising housing costs.
In separate statements, Piraeus Bank, Eurobank and Alpha Bank reported on Tuesday that they will freeze their interest rates variables in outstanding mortgage loans from next month to April 2024, referencing them to the March Euribor minus 20 basis points.
The money available in Greek households it has been reduced as interest rates have risen the European Central Bank, with an increase of between 10% and 25% in monthly mortgage payments.
Finance Minister Jristos Staikuras said on private Real FM radio that the National Bank of Greece is also expected to announce similar measures to stabilize monthly payments of borrowers at current levels. According to local media, even 500,000 citizens with mortgages would benefit from the measure.
The cost will be borne by the banks
Other smaller banks will also take similar measures “soon”, Staikuras said in a statement, stressing that the cost of the measures the banks will assume it and not the state budget.
Greek banks have seen an increase in demand for new loans mortgages as the economy recovers from a decade-long financial crisis and the coronavirus pandemic.
In 2022 the Greek banks had around 3,500 million euros in net earnings thanks, in part, to higher spreads due to higher interest rates.
The rate of average interest of Greek mortgage loans stood at 4% in January this year, up from 3.1% in 2022, according to Bank of Greece data.
The vast majority of outstanding mortgage loans in Greece – valued at around 27,000 million euros – have a rate of variable interest.