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28th November 2022
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HomeSwiss Franc LoansHomeowners win Swiss franc loan fight

Homeowners win Swiss franc loan fight

A number of home buyers in Cyprus have won their legal battle to be released from their crippling Swiss franc loans.

In what could prove be a landmark decision, a judge at the Paphos district court ruled in favour of borrowers whose Swiss franc loans were granted by the National Bank of Greece (Cyprus) Ltd; the borrowers were represented by the Zambartas law firm.

The judge hearing the case ordered the bank to convert their Swiss franc loans into Euros at the exchange rate that applied at the time the loan was granted.

The judge also ruled that bank was not entitled to charge interest on the late payments and rejected the bank’s claim to impose interest at 14% on the loan closure amount.

The judgement follows similar court rulings in favour of Swiss currency borrowers in Poland, Hungary and Croatia.

Swiss franc loans in Cyprus

Many homebuyers in Cyprus were persuaded by the local banks to take out home loans and mortgages denominated in Swiss francs in the years following the island’s accession to the European Union. They were attracted by the promise of low interest rates; the Swiss franc is a ‘stable currency’.

In cases brought to my attention, banks apparently failed to advise borrowers of the risks of fluctuations in exchange rates and interest rates inherent in foreign currency loans.

The value of the Swiss currency has more than doubled since 2008 sending loan repayments skyrocketing. British borrowers have been hit particularly hard as the value of Sterling has been on a downward trajectory since the Brexit referendum was announced in 2015.

The situation was further exacerbated when the Swiss franc abandoned its currency ceiling against the Euro in 2015.

The stress resulting from their crippling loan repayments has caused numerous marriage break-ups and tragically a number of suicides.

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16 COMMENTS

  1. Hi I’m caught up in this with 2 properties 1 is been dealt with under the mis selling debacle which has been running years but the other 1 is with alpha bank lost my husband in 2014 with a brain tumour which could poss be under the strain of all this..

    Struggling big time ….sending 1200 pounds a month out there is crippling me …..Is it worth trying to contact the solicitor u refer to cos the other action is wiping me out scared of the cost implications..

    • The action against the National Bank of Greece (Cyprus) Ltd. started in 2013 and it’s taken 9 years to win the hard fought battle. You could contact the firm to see if they could offer any help.

      It seems that you’re already with another firm, which could complicate matters as you’ll have start from square one again.

  2. Pleased of the outcome lucky the defendants were “National Bank of Greece” otherwise being a local Bank, I believe it would had been a different result.

      • Oh, I thought the “National Bank of Greece” was founded in 1841 in Athens,
        At least the Bank has lost wherever they are registered.
        What I can’t see is no media coverage on this.

        • I’ve edited the article to make it clear that the bank is the National Bank Of Greece (Cyprus) Ltd.

          As for media reports, I got a heads-up and was sent the ruling. I expect it will be available on the cylaw.org website – it’s case number 153/2013

          • @ Nigel
            I cant seem to find the anything on cylaw with case number 153/2013, any chance you can add a link
            thanks

          • @Aggis
            I’ve sent you the judgement by email. CYLAW have yet to include it in their database.

  3. What about those that have paid off this mortgage? I had just retired when I took out a Swiss Franc mortgage. As a result of the banks actions, I had to return to work for another 10 years to pay off the mortgage on a property that is now virtually worthless. Alpha bank nearly destroyed me and many of us are due justice from the Cypriot banks.

    • As you’ve repaid your loan and settled your account with the bank, I doubt you have a case against them.

  4. We were convinced to get a Swiss franc mortgage in 2006 by the developer when we purchased our property in 2006. Since then we converted the remaining loan to EUR as soon as we could to limit the cost and still afford to pay the monthly mortgage which was high.

    The conversion to EUR cost us a lot of money in the long run, the bank did give us a small discount but the house has cost us considerably more over the years.

    My question is even though we converted to EUR several years ago, is there a case for us to claim for the initial Swiss Franc mortgage and the significant increase in the monthly payment and when converted due to the conversion rate used?

    As stated the bank (Alpha Bank), did give us a small discount on the conversion but nothing like the real cost, also the bank forced us to sign ‘an agreement’ to obtain the converted loan which says we can’t challenge them again for this issue. If we didn’t convert when we did then we wouldn’t have been able to continue with the mortgage payments and therefore keep our house, therefore we took the conversion loan offer because in reality we didn’t have a choice, convert or lose the house!!

    Would there be any redress with the bank with the above situation? I’m certain there will be many others in the same situation and also some who couldn’t afford the conversion loan and lost their homes.

    What’s your opinion Nigel?

    • As you signed an agreement that said you couldn’t challenge them again on this issue, I doubt you’ll be able to get any redress from the bank. But I’m not a lawyer and I suggest you get an independent lawyer to look at the agreement to see whether it’s worthwhile pursuing the bank.

  5. Please make the banks sort this asap also they must contact all their customers with swiss frank loans before any more suicide/or break ups occur.

    These people have lived with this horror story for almost 20 years so now sort it A.S.A.P.

    ALSO IS THERE A HONEST LAW FIRM THAT COULD HELP THEM ALL ASAP FOR A REASONBLE COLLECTIVE FEE

    • There’s a link in the article to an honest law firm that won this particular case for their clients.

  6. I am caught up in the Swiss franc mortgage problem. It’s still not resolved and now I will not be able to start another mortgage due to my age. Sadly my wife did commit suicide due to this and the constant pressure from the banks. I also suffered mentally ever since and now no longer have the funds to pay for my house. The effect this has had on me and my family is devastating.

    The banks should be held to account for all the pain and suffering they have caused.

    I expect I will loose my house and then be homeless.

    This was supposed to be our dream. Instead I lost my wife, my health, my money and future.

    What is there left but to sign a deal with the banks that did all of this and say it’s a fair settlement for what they did? What do you think?

    • I’m sorry to hear that your wife took her own life. I cannot imagine the anguish and pain you must have been going through.

      The banks do not care how people suffer as a consequence of their actions. All they want is the your money.

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