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Wednesday 15th July 2020
Home News Mortgage-to-rent scheme will be selective

Mortgage-to-rent scheme will be selective

mortgage to rent schemeTHE mortgage-to-rent, under consideration as a means of protecting primary residences, will be effectively financed by the state budget and will only apply to specific cases, Finance Minister Harris Georgiades said yesterday.

It will allow the owners to continue to live in the house by paying lower rent instead of a prohibitively high instalment, the minister said in an interview with the Cyprus News Agency.

“In some cases there will not be a scheme with taxpayer money that will support cases that do not fulfil the strict social and income criteria that will be set,” Georgiades said.

Georgiades said the return to growth amid the ongoing credit crunch was linked to restoring the banks’ capability to lend. That in turn was connected with the issue of the crippling non-performing loans (NPLs), which had to be dealt with.

“This handling and management cannot be general, generalised, and sweeping,” he said. “It should maintain different handling for different cases.”

NPLs have reached 50 per cent of total loans – at €22bn, or 135 per cent of GDP.

The International Monetary Fund urged Cypriot legislators to put in place a “strong legal framework to facilitate foreclosures.”

Georgiades said non-viable loans and uncooperative borrowers could be dealt with by an asset management company, like in other countries with the same problem.

“It should be in the banks’ options,” the minister said.

He said this was not a matter that must be decided at a political level.

“It is mainly, and it should be, a decision based on the banks’ operational plans and not something that will be decided by political decisions, political interventions, or much worse, third party interventions, possibly by those affected trying to secure their interest on the back of the public interest,” Georgiades said.

The minister acknowledged that banks’ capability to collect debt had been limited and that laws should be enacted to bolster their potential.

Procedures against uncooperative borrowers could have taken 15-20 years, the minister said.

“This was certainly a serious drawback, which must be corrected,” he said.

Editor’s notes

The Cyprus Land Development Corporation (CLDC) has been instructed by the government to study the Irish mortgage-to-rent scheme. To qualify for the mortgage-to-rent scheme in that country, the applicant’s mortgage, property and household must meet the following strict criteria:


a. You must be unable to make the repayments on your Mortgage Loan and your lender must have decided that this situation is unlikely to change in the future.

b. You must be engaging with your lender to try to find a solution to your situation.

c. You must be in or have completed the Mortgage Arrears Resolution Process (MARP) with your lender.


d. Your property must be in negative equity.

e. You must not own any other property.

f. You must be living in a property that suits your needs i.e. not be over or under-accommodated, in accordance with Local Authority guidelines.

g. You must be living in a property of a value no more than €220,000 in the Greater Dublin area and €180,000 in the rest of the country.


h. You must be eligible for Social Housing Support in the local authority in whose area your house is located.

i. Your net household income must not exceed €25,000*, €30,000* or €35,000* a year, depending on what part of the country you live in (net household income is the household income after taxes and social insurance (PRSI) have been taken off). (*Additional allowances for children).

j. You cannot have capital assets worth in excess of €20,000.

k. You must have a long-term right to remain in Ireland.

Further reading: A Guide to the Mortgage to Rent Scheme (Ireland)


  1. The answer is to address two problems that is one raise the levels of Cypriot honesty (my neighbour moved into my land because I was not there without wanting to pay a cent and the Council or Police don’t want to evict him) and to create employment.

  2. And the Cyprus public service administration in the form of CLDC is to be charged with delivering this using even just a few of the parameters quoted that apply in Ireland? Goodness me I hate to think what kind of unimaginable mess this will result in. We seem incapable of applying the rules to even the simplest and menial of tasks or policies. To have fixed parameters to work to will be beyond capability and will lead to chaos.

    I do so hope I am wrong but past experience does not indicate too much hope. Let’s hope hope however that this is the start of a new beginning.

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